The headquarters of Barclays Plc beyond the West India Quay Docklands Light Railway station in the Canary Wharf financial district in London, UK, on Monday, March 20, 2023.
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LONDON — Barclays on Thursday reported net profit of £1.78 billion ($2.2 billion) for the first quarter, beating expectations and coming in 27% higher year-on-year.
A consensus Reuters poll of analysts forecast net profit at £1.432 billion.
On a branch basis, income from the bank’s consumer, cards and payments division rose 47%, compensating for just 1% growth in its corporate and investment bank division. It partly attributed this to its acquisition of retailer Gap’s credit card portfolio.
The income of Barclays UK was up 19% due to improved net interest income.
The bank also flagged £500 million in credit impairment charges, which it said resulted from higher U.S. card balances and the “continuing normalisation anticipated in US cards delinquencies.”
Impairment charges are used by businesses to write off assets. In its previous results, Barclays said it set aside £1.2 billion for such charges last year, as its customers struggled with cost pressures.
Barclays shares were up 4.3% at 8:55 a.m. in London.
Analysts at Jefferies said the “robust” results suggested scope for consensus upgrades, with “not a lot to nitpick.”
Barclays said it “remains on track to deliver its 2023 targets, with all performance metrics in line with or ahead of guidance” at the first quarter.
Chief Executive Officer C. S. Venkatakrishnan described it as a “strong” quarter, with income up 11% to £7.2 billion.
“The momentum across the group allows us to maintain a robust capital position, deliver attractive returns to shareholders, and support our customers and clients through an uncertain economic environment,” he said in a statement.
The results come after a turbulent period for the global banking sector, which saw the collapse of U.S.-based Silicon Valley Bank and several other regional lenders in early March and the rapid takeover of Credit Suisse by Swiss rival UBS.
The bank was briefly swept up in the banking volatility of last month, when its stock plunged and credit default swaps — a form of insurance for a company’s bondholders against its default — rose sharply.