Barclays posts better-than-expected £1.1bn Q3 profit
Barclays on Thursday reported better-than-expected third quarter profits on the back of a strong performance from its consumer businesses as bad loan provision fell sharply from the previous three months.
The bank posted a pre-tax profit £1.1 billion for the three months to September, compared with £200m a year ago and double analysts forecasts. Impairment and provision charges were £608m, up 32%, but two thirds lower than the previous three months.
Its core capital ratio, a major measure of financial strength, rose to 14.6% against expectations of 14%.
The third quarter bad debt provision took the total set aside to £4.3bn so far this year. Barclays UK reported a pre-tax profit of £196m, citing lower impairment charges and a limited recovery in economic activity.
Consumer, cards and payments delivered a £165m profit while at the investment bank revenues soared by almost a third to £1.7bn.
“Provided macroeconomic assumptions remain consistent with expectations, we expect the second half impairment charge to be materially below that of the first half and it is likely that the full year 2021 impairment charge will be below that of 2020,” Barclays said.
Richard Hunter at interactive investor said the results were "a strong quarterly performance, even if it does not reverse the damage suffered in the year so far".
"The share price has inevitably tracked the difficulties in both performance and prospects, and has fallen 37% over the last year, as compared to a decline of 20% for the wider FTSE100. In the year to date, the shares have fallen by 42%."
"Even so, with most metrics having exceeded expectations and with a seemingly firm hand on the tiller, Barclays has provided a glimmer of hope to what has been a turbulent time for the banks. With its diverse business model both by product line and geography, it is well-positioned for the impending challenges and has become a preferred play within the sector, as the market consensus has recently improved to a strong buy.”