24th Oct 2024 08:39
(Alliance News) - Barclays PLC on Thursday raised its annual outlook after third-quarter earnings beat forecasts boosted by a strong performance at its UK business and a drop in provisions.
Total income at the UK lender rose 4.6% to GBP6.54 billion from GBP6.26 billion a year prior. Pretax profit surged 18% to GBP2.23 billion from GBP1.89 billion.
According to RBC Capital Markets consensus for total income was GBP6.46 billion and for pretax profit GBP1.97 billion.
In response, shares in Barclays rose 2.9% to 245.07 pence each in London on Thursday morning. The wider FTSE 100 was up 0.5%.
Total income at Barclays UK grew 4.3% to GBP1.95 billion from GBP1.87 billion, while at the investment bank income increased by 5.9% to GBP2.85 billion from GBP2.69 billion.
Barclays UK beat consensus by 27%, according to RBC, while investment banking was 1% below expectations.
Total income fell 3.4% at the Private Bank and Wealth Management arm and eased 2.3% in the US Consumer Bank unit.
On the investment bank, Barclays said: "Global Markets income increased 3%, with [fixed income, currencies, and commodities] and equities both up 3% respectively. Investment banking income increased 13%, as higher fee income in advisory and debt and equity capital markets was partially offset by lower income in the international corporate bank," it said.
Operating costs were broadly unchanged at GBP3.95 billion, while the cost:income ratio declined to 61% from 63%.
The CET1 ratio was 13.8% compared with 14.0% a year ago.
Impairment charges fell to GBP82 million from GBP267 million driven by low delinquencies in UK cards, high quality mortgage lending portfolio and the improved macroeconomic outlook.
The net interest margin improved to 3.34% from 3.04%.
Looking ahead, it now expects 2024 net interest income, excluding the investment bank and head office, above GBP11.0 billion. It had previously expected the figure to land at GBP11.0 billion. Barclays UK net interest income was raised to GBP6.5 billion from GBP6.3 billion.
The lender plans to return at least GBP10 billion of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for buybacks.
It is targetting total income of GBP30 billion by 2026, with operating expenses around GBP17 billion.
Chief Executive CS Venkatakrishnan said: "We continue to be focused on disciplined execution of our three year plan and are encouraged with progress to date. Whilst there is more work to do, the group is on track to achieve its target of greater than 12% RoTE in 2026. In Q324 Barclays delivered a RoTE of 12.3%, supporting our target of greater than 10% in 2024."
By Jeremy Cutler, Alliance News reporter
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