Barclays beats expectations in the first quarter as loan impairment charges slide

Barclays beats expectations in the first quarter as loan impairment charges slide [ad_1]

An indication hangs above an entrance to a department of Barclays Plc financial institution in the City of London, U.Okay.

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LONDON — Barclays on Friday reported first-quarter internet revenue of £1.7 billion ($2.37 billion), helped by a fall in loan impairment charges.

The British financial institution stated these charges had fallen “significantly” in the first three months of the 12 months to £55 million — down from £2.1 billion in the first quarter of 2020.

Analysts had anticipated first-quarter internet revenue to return in at £1.3 billion, based on Refinitiv. Barclays posted internet revenue of £220 million for the fourth quarter of 2020.

Shares of Barclays slipped greater than 5% on the information. The financial institution’s inventory value is up about 31% since the begin of the 12 months.

Barclays reported a rebound in fairness buying and selling as inventory markets recovered from their coronavirus-induced hunch final 12 months. Total revenue at its funding banking arm slipped 1% to £3.6 billion, however equities — up 65% in their best-ever quarter on a comparable foundation — helped offset a 35% fall in fastened revenue, currencies and commodities revenue.

Other highlights for the quarter:

  • Revenues hit £5.9 billion, down from £6.3 billion a 12 months in the past.
  • Operating bills hit £3.5 billion, up from £3.3 billion a 12 months in the past.
  • CET 1 ratio, a measure of financial institution solvency, got here in at 14.6%, a fall from 15.1% final quarter.

“While momentum in the consumer businesses, particularly card balances, will take time to build, Barclays secured significant new growth opportunities in Q1 (first quarter),” Jes Staley, CEO of Barclays stated in an announcement.

Outlook

Going ahead, the British lender expects prices to rise in 2021 in comparison with the earlier 12 months. This is on the again of coronavirus-related bills, an actual property overview, additional structural price motion and better pay.

“While evidence of recovery is encouraging, we have continued to take a cautious view of the impact of the pandemic on the business. We remain disciplined on costs, with a cost to income ratio of 61% this quarter,” Staley stated.

Sudeepto Mukherjee, senior vice chairman at consultancy Publicis Sapient, stated the financial institution’s outcomes mirrored a robust efficiency in the first quarter of 2021.

“This is largely thanks to their robust business model and strong CIB (Corporate and Investment Banking) performance. However, their consumer business still faces the headwinds of the Covid-19 pandemic which will likely continue throughout 2021,” he stated in a word.

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