Barclays records 27% in profit in Q1

Barclays has announced a net profit of £1.78bn ($2.2bn) for the first quarter, beating expectations and marking a 27% increase year-on-year. The consensus Reuters poll of analysts had forecast net profit at £1.432bn. The bank’s consumer, cards and payments division led on income, increasing 47%, while corporate and investment banking grew by just 1%. Barclays said this was partly due to the acquisition of Gap’s credit card portfolio. Its UK business saw income rise by 19% due to improved net interest income. Barclays also reported £500m in credit impairment charges.

Barclays shares rose by 4.3% at 8:55 a.m. in London following the announcement. Jefferies analysts said the “robust” results suggested there was scope for consensus upgrades, with “not a lot to nitpick”. Barclays CEO C. S. Venkatakrishnan said in a statement that the bank “remains on track to deliver its 2023 targets, with all performance metrics in line with or ahead of guidance”.

The results follow a difficult period for the global banking industry that saw the collapse of US-based Silicon Valley Bank and several other regional lenders in early March and the rapid takeover of Credit Suisse by Swiss rival UBS. Barclays’ strong results contrasted with Deutsche Bank’s first-quarter results, announced on Thursday, which showed a net profit of €1.158bn ($1.28bn), above a consensus forecast of €864.54m. Deutsche Bank’s report nevertheless showed a fall in deposits over the quarter.

Market watchers are now focusing on US banks after First Republic revealed heavier-than-expected deposit outflows in the first quarter, with its stock dropping to a record low. However, Barclays appears to be weathering the storm and remaining optimistic. “The momentum across the group allows us to maintain a robust capital position, deliver attractive returns to shareholders, and support our customers and clients through an uncertain economic environment,” Venkatakrishnan said.

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