Bank in talks

Barclays profits hit as buyback delayed further

Barclays Glasgow campus
Barclays campus in Glasgow

Barclays has further delayed its £1 billion share buyback as it deals with a conduct charge that led to a 7% fall in quarterly profits.

The bank posted pre-tax profits of £2.23 billion for the first three months of 2022, down from £2.4bn a year ago.

The fall was a result of the conduct charge which covered over-issuance of securities in the US and customer compensation costs for a separate matter.

The bank said it was “prudent” to push back the start of its share buyback scheme while it holds talks with the US Securities and Exchange Commission about restating its financial announcements for last year.

Barclays had already delayed its shares buyback last month after revealing it issued $15.2 billion more structured products in the US than it had permission for from regulators.

It said today that the buyback would be delayed until talks are completed. “Barclays remains committed to the share buyback programme and the intention would be to launch it as soon as practicable,” it said.

Today’s figurds show that UK profit before tax increased to £594m (Q121: £460m) and total income increased 5% to £1.65bn.

Personal Banking income increased 11% to just over £1bn, driven by rising interest rates and supported by the benefit of strong 2021 mortgage demand.

Business Banking income increased 4% to £351m driven by rising interest rates alongside improved transaction based revenues, partially offset by lower government scheme lending income as repayments continue.

Credit impairment charges decreased 38% to £48m reflecting lower unsecured lending balances and lower delinquency rates. As at 31 March, 30 and 90 day arrears rates in UK cards were 1% (Q121: 1.6%) and 0.3% (Q121: 0.8%) respectively.

The credit card and consumer loan businesses maintain appropriate provision levels in light of emerging affordability headwinds, as reflected in a total coverage ratio of 10.6% (December 2021: 10.9%)

Group income was up 10% to £6.5bn. Income growth was driven partly by Global Markets, which has been helping clients navigate ongoing market volatility caused by geopolitical and economic challenges including the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK.

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