New York, USA: Barclays Bank logo was photographed in Manhattan, September 16, 2023.
Michael Cappeller | Photo Alliance | Getty Images
The British Bank Barclays on Wednesday reported a small beat at the top and bottom line in the first quarter, boosting investment banks’ performance.
According to LSEG, pre-tax profit was £2.7 billion ($3.6 billion), an increase of 11% year-on-year, with analysts’ forecast of £2.49 billion. Group revenue exceeds £7.7 billion, surpassing analyst forecasts of £7.333 billion.
Revenue from the most profitable sector, investment banks, rose 16% to £3.87 billion.
Barclays’ return on tangible capital, a measure of profitability, reached 14% in the first quarter, after an average of 7.5% in the December quarter.
The key to investors is how Barclays navigates its substantial US exposure in the market storms unleashed by US President Donald Trump’s global trade tariffs. In particular, Barclays has had a major presence in the state since it acquired Titan Lehman Brothers’ collapsed investment banking and capital market companies for $1.75 billion.
Speaking to CNBC’s “Squawk Box Europe” on Wednesday, Barclays CEO CS Venkatakrishnan said he hopes for “pretty high market volatility” in the future.
“We’re calming right now, but we think we’ll continue to go up and down. Beyond that, as we saw in our results, market volatility helps us manage risk for our clients. As long as we manage risks well, we can do so in a profitable way that supports market revenue.”
“The more this continues in the future, the more economic uncertainty the more companies are postponing decisions,” Venkatakrishnan said.
“We have a good starting point, but we need to prepare,” he told CNBC.
The U.S. consumer banking business of UK lenders has progressed, bringing tangible capital gains of 9.1% in 2024 from 4.1% in 2023. It rose 1% to £864 million in the first quarter, but earnings before taxes ranged from 7% to £55 million.
Barclays shares robbed a sudden fall as the White House launched a trade war on April 2, but then recovered, rising 10% a year. In contrast to the Swiss giant UBS, US scaffolding and domestic concerns have led to stock prices bleeding.
Barclays’ Core UK Consumer Bank Unit posted a 12% revenue of £484 million and a 23% pre-tax profit of £207 million, supported by the acquisition of Tesco Bank.
The UK was able to receive the unusual economic benefits as a result of its divorce from the European Union after being hit by 20% with US mutual tariffs in early April. London, which faces only 10% of such White House taxes, is now trying to leverage its historic transatlantic relations and a broadly balanced trade record with the US to ensure a sweeter commercial arrangement. However, a widespread slowdown in global trade and growth is expected to put a strain on the economy.
Meanwhile, pressure in Barclays’ households has been eased, with the enormous HSBC announced plans to eliminate M&A and equity capital market companies in the UK, US and Europe amid improvements in its investment business. And the British forces of Spanish lender Banco Santander – which abdicated UBS to become the largest bank in continental Europe in recent weeks – said in March 750 staff members were at risk of redundancy as it targeted 95 branch closures as part of a broader plan to update its footprint from June 2025.
Santander claims that the UK is a “core market,” but the latest moves question whether Spanish lenders intend to leave British High Street.
