Barclays Earnings Top Expectations

Barclays posted stronger than had been expected earnings Wednesday despite challenging conditions in the market and lingering worries over Brexit.

The bank, based in the UK, posted net income of £1 billion equal to $1.29 billion for its three-month period ended September 30. Analysts were expecting net income for the third quarter to be £723 million.

CEO Jes Staley said that despite macro-economic uncertainly with particular concerns related to Brexit 2018 is turning out to be a year of delivery for Barclay’s strategy.

Staley added that the bank remains focused on the generation of improved returns and the distributing of a better proportion of its excess capital over time to its shareholders.

Pre-tax profit at Barclays for the period was £1.46 billion in comparison to £1.12 billion for the same three-months one year ago.

As of the period ending September 30, the common equity Tier 1 capital, which is a key measure of strength on the balance sheet, was 13.2% at the bank. That figure was in line with analyst expectations.

Staley told analysts on Wednesday that the wholesale and consumer international lender would lower yearly funding costs per year by £165 million. Staley said the bank is planning to do that by redeeming preference shares in the amount of $2.65 billion.

Income from the markets and trading business at Barclays was up 19% during the quarter, which likely reaffirms a banking strategy that is investment led, which has received criticism from activist investors.

Earlier in 2018, Barclays posted the best earnings report for a quarter it has had in over three years, as it saw profits before taxes nearly triple for the quarter ending June 30.

The figures, which are much improved, followed a difficult period of 18 months for the lender. The bank has been struggling as it attempts to shake off its reputational issues following scandals that have hit the last several years, with the most recent centering on allegations of unlawful mistreatment of a whistleblower in 2017.

Barclay’s cut its labor force by over 56,000, sold 22 of its businesses worldwide and shut down its retail banking across Africa over the last few years.

It was sued as well by the U.S. Justice Department over the selling of its toxic mortgage-backed securities prior to the financial crisis of 2008 and agreed to pay over $2 billion in a settlement.

Leave a Reply