Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Barclays’ profits fell 13 per cent in the first quarter, as the bank announced its first results since chief executive CS Venkatakrishnan set out an ambitious three-year plan to revive its share price.
The UK lender reported net profits of £1.6bn in the first three months of the year, down from £1.8bn during the same period last year but better than analysts had been expecting. Revenue also fell slightly to £7bn from £7.2bn a year earlier.
Barclays said part of the decline in profits was because of deposit flight, as UK savers switched to higher yielding accounts in an era of higher interest rates.
The bank has made its domestic business a key part of its strategic plan, unveiled in February.
But revenues at Barclays UK — which captures the lender’s personal banking, domestic consumer card business and UK business banking — fell 7 per cent because of the shifts by depositors and pressure on mortgage margins, the bank said.
However, Anna Cross, the bank’s chief financial officer, said there had been a slowdown in savers switching to higher yielding accounts.
Citigroup analyst Andrew Coombs said Barclays had delivered “a solid set of results, which should be well received”.
However, its investment bank was hit by a decline in revenues from its fixed income, currencies and commodities traders, which dropped 21 per cent to £1.4bn because of lower volatility in European markets.
The decline in FICC trading revenues was partially offset by performance in the investment bank’s equities business, which was up 25 per cent from last year to £883mn.
“In global markets we did not capture market opportunities as much as our competitors did,” said Venkatakrishnan on an earnings call.
Barclays’ net interest margin, a measure of the difference between what the bank earns on loans versus what it pays out for deposits, was down to 3.09 per cent from 3.18 per cent a year earlier.
Shares in Barclays climbed more than 3 per cent in early trading.
