Bank update

Barclays posts lower profit amid deals drought

Barclays Glasgow campus
Barclays campus in Glasgow

Barclays posted a 12% fall in Q1 profit before tax to £2.27 billion from down from £2.6bn a year ago as mortgage pressures and the drought in M&A activity took a toll on its figures.

“Continued structural hedge momentum was more than offset by mortgage margin pressure and adverse deposit dynamics reflecting wider market trends,” said Barclays.

The net interest margin in the UK consumer division were 3.09% compared to 3.2% in the first quarter of 2023..

Barclays does not expect to increase its total dividend for the year, instead emphasising share buybacks to support shareholder returns.

Chief executive C. Venkatakrishnan, also known as Venkat, is under pressure to end years of stock market underperformance and in February he set out a strategy to rectify the situation with a wide-ranging overhaul.

He has pledged to cut costs, which has already resulted in job losses, and to return at least £10 billion to shareholders over three years. About £200 million of the £1 billion gross efficiency savings targeted by Venkat this year were achieved in the first quarter.

He said that first-quarter results showed the shake-up was on track.

“Across the bank and within each of our five divisions, we are driving an improved operational and financial performance,” he said, adding that the lender’s progress in the first quarter “keeps pace” with three-year targets he has set.

Shares rose by 6.7%, or 12.75p, to 204p.

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