25th Apr 2024 08:36
(Alliance News) - Barclays PLC on Thursday reported a fall in first quarter profits as a weak investment banking performance hindered performance.
In the first three months of 2024, pretax profit fell to GBP2.28 billion from GBP2.60 billion a year prior, Barclays said. However, this beat the market consensus by around 4%.
Shares in Barclays rose 4.2% to 199.22 pence each in London on Thursday morning. The wider FTSE 100 rose 0.5%.
Barclays said total income fell to GBP6.95 billion in the first quarter, from GBP7.24 billion a year earlier. Net interest income fell 4% to GBP3.07 billion from GBP3.05 billion.
The net interest margin declined to 3.09% from 3.18%, while the return on average tangible shareholders' equity declined to 12.3% from 15.0%.
Barclays Investment Banking income fell 7% to GBP3.33 billion from GBP3.57 billion. Within Global Markets, a strong performance in Equities was more than offset by fixed income.
In Investment Banking, increased fee income in Debt and Equity capital markets were more than offset by lower fee income in Advisory and lower income in Transaction banking.
Barclays UK income decreased 7% to GBP1.83 billion from GBP1.96 billion as higher structural hedge income was more than offset by adverse dynamics in deposits and mortgages, in addition to the transfer of Wealth Management & Investments to Barclays Private Bank and Wealth Management.
Barclays UK Corporate Bank income decreased 6% to GBP434 million from GBP463 million, reflecting lower liquidity pool income whilst maintaining stable average deposits.
Barclays Private Bank and Wealth Management income increased 20% to GBP312 million from GBP259 million, reflecting the transfer of WM&I from Barclays UK, partially offset by lower NII due to adverse deposit dynamics.
Barclays US Consumer Bank income rose 4% to GBP859 million from GBP826 million.
Barclays said total operating costs fell 3% to GBP4.00 billion from GBP4.11 billion. Including a UK regulatory levy and litigation expenses, total operating expenses rose 2% to GBP4.18 billion from GBP4.11 billion.
Barclays said its cost to income ratio was 60% with a target of around 63% in 2024 unchanged.
Barclays said total deposits increased by GBP13.5 billion to GBP552.3 billion compared to GBP538.8 billion at the end of 2023.
Credit impairment charges were flat at GBP0.5 billion.
The common equity tier 1 ratio fell to 13.5% from 13.8%, in the middle of the target range of 13% to 14%.
For 2024, Barclays is targeting a return on tangible equity of greater than 10% and GBP1 billion of efficiency savings.
It expects Barclays Group net interest income, excluding Investment Banking and Head Office of around GBP10.7 billion.
Looking out to 2026, Barclays targets a RoTE greater than 12% and capital returns of at least GBP10 billion of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for buybacks.
It plans to keep the total dividend stable at 2023's level in absolute terms, with progressive dividend per share growth driven through share count reduction as a result of increased share buybacks.
Barclays is aiming for group total income of around GBP30 billion.
By Jeremy Cutler, Alliance News reporter
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