Signage shines through a window reflecting Barclays head office in Canary Wharf, London, U.K.
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Barclays on Thursday reported first-quarter net income attributable to shareholders of £1.55 billion ($1.93 billion), beating expectations and returning the British lender to profit amid a major strategic overhaul.
Analysts polled by Reuters had expected net profit attributable to shareholders of £1.29 billion for the quarter, according to LSEG data.
Pre-tax profits, however, were down 12% to £2.28 billion from $2.6 billion a year earlier, as the bank braces to implement its extensive revamp plans.
Here are some other highlights:
- First-quarter group revenue was £6.95 billion, down 4% from the same period last year.
- Credit impairment charges were £513 million, compared with £524 million in the first quarter of 2023.
- Common equity tier one (CET1) capital ratio, a measure of the bank’s financial strength, was 13.5%, down from 13.8% in the previous quarter.
- Full-year return on tangible equity (RoTE) was 12.3%.
- Quarterly total operating expenses were up 2% year-on-year at £4.2 billion.
Barclays reported a net loss of £111 million in the fourth quarter of 2023 due to an operational shake-up designed to reduce costs and improve efficiencies.
CEO C.S. Venkatakrishnan said the bank’s first-quarter results showed it was committed to implementing its overhaul plans, including via further investment in its U.K. consumer business and through its acquisition of Tesco Bank, which is expected to complete in the fourth quarter of this year.
“We are focused on disciplined execution of the plan that we presented at our Investor Update on 20th February,” he said in a statement.
The revamp plans included a £900 million hit due to structural cost-cutting measures, which the bank said were expected to lead to gross cost savings of around £500 million in 2024, with an expected payback period of less than two years.
The overhaul saw the reorganization of the business into five operating divisions, separating the corporate and investment bank to form: Barclays U.K., Barclays U.K. Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays U.S. Consumer Bank.
The bank also pledged to return £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks.
— CNBC’s Elliot Smith contributed to this report.
Barclays, a British lender, announced that it has returned to profit in the first quarter of this year following reporting net income attributable to shareholders of £1.55 billion ($1.93 billion). This significantly surpassed analysts’ expectations, with projections estimating net profit of £1.29 billion. Although pre-tax profits were down 12% from the prior year at £2.28 billion, the bank’s strategic overhaul plans contributed to this decline. Despite this, Barclays remains committed to implementing its extensive revamp, with CEO C.S. Venkatakrishnan emphasizing the bank’s dedication to its overhaul plans.
In addition to its returning profit, Barclays disclosed various other highlights from the first quarter. Group revenue was £6.95 billion, marking a 4% decrease compared to the same period last year. Credit impairment charges were £513 million, slightly lower than the first quarter of 2023 figure of £524 million. The bank’s common equity tier one (CET1) capital ratio, which measures its financial strength, stood at 13.5%, down slightly from the previous quarter’s 13.8%. Barclays achieved a full-year return on tangible equity (RoTE) of 12.3%. Furthermore, quarterly total operating expenses rose 2% year-on-year, reaching £4.2 billion.
Despite the bank’s positive first-quarter performance, it did face a net loss of £111 million in the fourth quarter of 2023 due to operational restructuring aimed at cutting costs and improving efficiencies. Barclays remains focused on disciplined execution of its overhaul plans, including further investments in its U.K. consumer business and the ongoing acquisition of Tesco Bank, which is expected to be completed in the fourth quarter of this year.
Barclays’ strategic revamp aims to achieve gross cost savings of approximately £500 million in 2024, with an expected payback period of under two years. As part of this overhaul, the bank reorganized its business into five operating divisions, including Barclays U.K., Barclays U.K. Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays U.S. Consumer Bank. Additionally, the bank pledged to return £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks.
Looking ahead, the implications of Barclays’ positive first-quarter results and ongoing strategic overhaul have notable implications for the industry. As the bank continues to execute its revamp plans and invest in its consumer business, it is likely to enhance its competitive position and drive further growth. Additionally, the acquisition of Tesco Bank will expand Barclays’ reach and market presence, providing new opportunities for growth and profitability.
In line with emerging trends in the banking sector, Barclays’ focus on reducing costs and improving efficiencies reflects the industry’s ongoing emphasis on optimization and digital transformation. The bank’s commitment to returning £10 billion to shareholders demonstrates its confidence in its future performance and ability to generate sustainable
