The revitalization plan has achieved remarkable results, with Barclays' net interest income, fixed income business, and equity business revenue all exceeding expectations. Barclays' CEO stated that the data for the third quarter indicates that Barclays is on track to achieve its set goals
Revitalization plan shows significant results. Barclays' total revenue in Q3 rose by 5% driven by better-than-expected performance in net interest income, fixed income business, and stock business, with net interest income reaching £3.31 billion.
On Thursday, October 24th, Barclays Bank of the UK released its third-quarter financial report:
Q3 revenue: £6.5 billion, higher than the expected £6.39 billion;
Q3 profit: £1.6 billion, a 23% year-on-year increase;
Tangible equity return rate: 12.3%, expected 9.64%;
Common Equity Tier 1 (CET1) ratio: 13.8%;
Cost-to-income ratio: 61%, expected 62.6%.
By business segment:
- Net interest income: £3.31 billion, higher than the expected £3.11 billion;
- Fixed income, foreign exchange, and commodities income: £1.18 billion, higher than the expected £1.13 billion;
- Equity business income: £692 million, higher than the expected £688 million;
- Investment banking fee income: £594 million, higher than the expected £552.3 million.
Future expectations:
- Full-year net interest income: exceeding £11 billion, benefiting from persistently low interest rates;
- Full-year cost-to-income ratio: around 63%, estimated 63.4%;
- Full-year common equity Tier 1 adequacy ratio: 13%-14%, estimated 13.7%.
Barclays CEO C. S. Venkatakrishnan stated in an interview with CNBC today that the data for the third quarter indicates Barclays is on track to achieve its set goals. Venkatakrishnan said:
"We have revised up net interest income, and the UK business has expanded net interest income in the past two quarters. Therefore, we have raised guidance for the UK business and the entire bank, and we see good cost control."
Barclays CFO Anna Cross said in a conference call with reporters:
"In our performance, I focus on four points: stable income, cost control, progress in efficiency savings, credit performance, and strong capital position. In these four aspects, we are where we expected to be."
Earlier this year, Barclays announced a strategic restructuring aimed at reducing costs, increasing shareholder returns, stabilizing long-term financial performance, and focusing more on UK loans while reducing the costs of more volatile investment banking businesses.
After the financial report was released, Barclays' stock price rose by 4.3% to its highest level since October 2015, currently trading at 247.85. Barclays' stock price has risen by 55% year-to-date.
Barclays records £85 million loss in leveraged financing investment portfolio
Barclays reported a leverage financing investment portfolio loss of £85 million in the third quarter. CFO Anna Cross stated in a conference call with reporters:
"These positions were unwound quickly, and we periodically mark them to fair value before unwinding, as was the case this quarter."
Cross noted that the company has implemented "very strict risk limits" in managing this business, which is the latest sign of banks once again increasing lending.
However, these losses bring back memories of Wall Street performance two years ago, when banks provided substantial funding for corporate acquisitions, only to end up entangled in so-called "suspense debt" worth hundreds of billions of dollars