Barclays narrowly beats profit forecasts on strong consumer and credit card businesses

LONDON – Barclays reported third-quarter net profit of 1.27 billion pounds ($1.56 billion) on Tuesday, slightly above expectations, as strong results in its consumer and credit card businesses offset weak earnings at its investment banks.

Analysts polled by Reuters had made a consensus forecast of 1.18 billion pounds, compared with 1.33 billion pounds in the second quarter and 1.51 billion pounds in the same period in 2022.

Here are other highlights from the quarter:

• The CET1 ratio, a measure of banks’ financial strength, was 14%, up from 13.8% in the previous quarter.
• Return on tangible equity (RoTE) was 11%, with the bank targeting an increase of 10% in 2023.
• The group’s total operating costs fell 4% year-on-year to £3.9bn as inflation, business growth and investment were offset by “efficiency savings and lower litigation and conduct costs”.

Barclays CEO CS Venkatakrishnan said the bank “continued to manage loans well, remain disciplined on costs and maintain a strong capital position” in a “mixed market environment”.

“We see further opportunities to increase shareholder returns through cost efficiency and disciplined capital allocation across the Group.”

Barclays will set out its capital allocation priorities and revised financial targets in an investor update along with full-year results, he added.

Barclays’ corporate and investment bank (CIB) reported a 6% fall in revenue to £3.1bn, with the bank citing lower client activity in global markets and lower investment banking fees.

This was largely offset by a 9% rise in consumer, cards and payments (CC&P) revenue to £1.4bn, driven by higher US card balances and a transfer of Barclays UK’s wealth management and investments (WM&I) business was attributable

After announcing the £750m share buyback in July, the bank did not announce any new capital returns to shareholders.