Barclays narrowly beats profit forecasts in strong consumer, credit card business

A view of London’s Canary Wharf financial district.

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LONDON – Barclays on Tuesday reported a net profit of £1.27 billion ($1.56 billion) in the third quarter, slightly ahead of expectations as strong results in its consumer and credit card businesses weakened investment banking revenue.

Analysts polled by Reuters had produced a consensus forecast of £1.18bn, up from £1.33bn in the second quarter and £1.51bn in the same period in 2022.

Here are other highlights for the quarter:

  • The CET1 ratio, a measure of banks’ financial strength, stood at 14% from 13.8% in the previous quarter.
  • Return on fixed equity (RoTE) stood at 11%, with the bank targeting an upside of 10% by 2023.
  • The group’s total operating expenses fell 4% year-on-year to £3.9 billion as inflation, business growth and investments were “offset by efficiency savings and lower litigation and conduct fees.

Barclays CEO CS Venkatakrishnan said the bank “continued to manage debt well, was disciplined in costs and maintained a strong capital position” against a “mixed market backdrop”.

“We see additional opportunities to improve returns for shareholders through cost efficiency and streamlined capital allocation across the group.”

Barclays will set out its capital allocation priorities and revised funding targets in an investor update with its full-year earnings, he added.

Barclays’ corporate and investment banking (CIB) revenue fell 6% to £3.1 billion, with the bank citing lower client activity in global markets and lower investment banking fees.

This was largely offset by a 9% rise in revenue to £1.4 billion in its Consumer, Cards and Payments (CC&P) business, reflecting higher balances on US cards and the transfer of the Wealth Management and Investments (WM&I) division from Barclays UK.

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The bank has not announced any new capital returns to shareholders since July’s £750m withdrawal announcement.

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