30th Apr 2025 09:51
(Alliance News) - Barclays PLC on Wednesday topped market expectations in the first quarter, driven by a strong performance in its Investment Banking division which benefited from recent market volatility.
The London-based lender said pretax profit rose 19% to GBP2.72 billion in the first quarter from GBP2.28 billion a year prior, beating the GBP2.49 billion company-compiled consensus.
Total income rose 11% to GBP7.71 billion from GBP6.95 billion, well ahead of GBP7.29 billion consensus, driven by higher structural hedge income, higher income in Global Markets, particularly in fixed income, currencies, and commodities and at Tesco Bank.
But despite the profit and income beat, shares gave up early gains and were down 0.2% at 297.40 pence in London on Wednesday morning. They are up 11% in 2025 to date, however.
Analysts at Citi commented: "While we expect [the results] to drive a strong reaction at the open it is possible this may then fade as the sustainability of this comes under focus. We also note Barclays UK pre-provision profit is 2% shy of consensus, which provides a slightly cautious read to UK domestic peers."
Barclays Investment Banking division saw net income jump 16% to GBP3.87 billion in the quarter from GBP3.33 billion a year prior with FICC income up 21%.
The lender said growth reflected increased volatility and client activity, including a strong performance in macro and securitised products, and continued strength in financing. Equities income increased 9%.
There was also a strong performance in Barclays UK which saw net income increase 14% to GBP2.07 billion from GBP1.83 billion.
Barclays UK Corporate Bank net income rose 12%, as did Barclays Private Bank & Wealth Management. Growth was a more muted 0.6% at Barclays US Consumer Bank.
Group net interest income rose 14% to GBP3.52 billion from GBP3.07 billion.
Less encouragingly, credit impairment charges jumped 25% to GBP643 million from GBP513 million, primarily to reflect "elevated US macroeconomic uncertainty".
Group return on tangible equity increased to 14.0% from 12.3% and the CET1 capital ratio improved to 13.9% from 13.5% on-year.
Chief Executive CS Venkatakrishnan said it was "another strong quarter of execution".
He said the bank was well positioned to "deliver strong risk-adjusted returns in a wide range of macroeconomic scenarios".
"We remain committed to and confident in delivering our previously announced financial and distribution targets for 2025 and 2026," he added.
Looking ahead, Barclays raised its guidance for group net interest income to greater than GBP12.5 billion from GBP12.2 billion previously.
Other guidance for the full-year 2025 was left unchanged.
The lender expects a return on tangible equity of around 11% in 2025, a "progressive" increase in total capital returns versus 2024, a cost:income ratio of 61% with a CET1 ratio target range of 13% to 14%.
For 2026, Barclays expects a RoTE of greater than 12% and total income of around GBP30 billion.
By Jeremy Cutler, Alliance News reporter
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