Barclays Profit Falls as Mortgage Lending and Investment Bank Squeezed
Barclays has reported lower profits for the start of the year, as mortgage lending and deposits dipped and its investment bank was squeezed amid prevailing economic uncertainty.
Barclays bank branch
The high street banking giant reported a group pre-tax profit of £2.3 billion for the first three months of the year, down 12% from the £2.6 billion reported this time last year. However, the latest quarterly earnings figure came in above analysts’ expectations of £2.2 billion.
Barclays said income from its UK operations fell 7% year on year, with it facing more subdued mortgage lending amid weaker demand in the market. It saw customer deposits dip by 2% driven by lower customer account balances, which the bank said reflected broader consumer trends.
“We have now announced the sale of our performing Italian mortgage book and are investing in our higher returning UK consumer businesses, including through the expected completion of the Tesco Bank acquisition in the fourth quarter,” said Barclays group chief executive CS Venkatakrishnan.
Barclays also revealed that income from its investment bank fell 7% year on year, as a strong performance in the equities division was more than offset by lower activity in areas such as fixed income trading.
Investment banking
The bank aims to save about £1 billion by making the bank more efficient this year, and is targeting about £2 billion worth of savings in total by 2026.
Cost saving
“We are focused on disciplined execution of our cost-saving plan,” said Mr Venkatakrishnan.
The bank’s latest quarterly earnings figure came in above analysts’ expectations, despite the decline in profits. The results reflect the ongoing challenges faced by the banking industry, including weaker demand for mortgages and subdued consumer spending.
Banking industry
The article highlights the challenges faced by Barclays and the banking industry as a whole, as they navigate the current economic uncertainty. The bank’s efforts to reduce costs and invest in higher returning businesses are key to its future success.
Banking future
