Barclays Reports Lower Profits Amid Economic Uncertainty

Barclays, the high street banking giant, has 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. Despite the decline, the latest quarterly earnings figure came in above analysts’ expectations of £2.2 billion.

Barclays’ profits take a hit

The bank’s income from its UK operations fell 7% year on year, with mortgage lending and deposits dipping. Customer deposits decreased by 2%, driven by lower customer account balances. According to Barclays’ finance chief, Anna Cross, this partially reflects “seasonal” factors, including people paying credit card bills and tax bills at the start of the year. However, Cross noted that people moving money into accounts with higher returns has slowed down since the end of 2023.

Barclays’ investment bank also saw a 7% year-on-year decline in income, as a strong performance in the equities division was more than offset by lower activity in areas such as fixed income trading and deal-making by investment bankers.

Barclays’ investment bank struggles

Despite the challenges, Barclays’ group chief executive, CS Venkatakrishnan, said the bank is “focused on disciplined execution” of its cost-saving plan. 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. The overhaul also involves reducing its reliance on the weighty investment banking arm.

Barclays’ cost-cutting efforts

As the bank navigates the current economic uncertainty, it remains to be seen how it will adapt to the changing landscape. One thing is certain, however: Barclays is committed to making the necessary changes to stay ahead of the curve.

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