Barclays Plc’s traders surpassed expectations in the first quarter with a surprise increase in fixed income revenue.
(Bloomberg) — Barclays Plc’s traders surpassed expectations in the first quarter with a surprise increase in fixed income revenue.
Fixed-income trading revenue rose 9% to £1.79 billion ($2.2 billion), compared to the 11% fall expected by analysts. Equities trading, though, fell a worse-than-expected 33% to £704 million, falling short of a blowout quarter a year ago.
The trading results helped offset a drop in dealmaking fees and take overall pretax profit to £2.6 billion, beating expectations, according to analyst estimates compiled by Bloomberg.
“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,” Chief Executive Officer C.S. Venkatakrishnan, who completed cancer treatment earlier this year, said in a statement on Thursday.
Barclays is the second major UK bank to report earnings, following Standard Chartered Plc yesterday, as investors seek more clarity on the health of the global economy and lenders’ readiness for any distress.
Barclays reported provisions for souring loans of £524 million, more than three times higher than a year ago but slightly better than estimates. The bank said the rise reflected “continuing normalisation anticipated in US cards delinquencies.”
The absence of deals and financing activity has meant traders rather than rainmakers are driving the performance of the investment bank. Barclays joins most major Wall Street banks benefiting from market volatility in fixed income as traders bet on rapidly changing interest rates and inflation.
Rising rates also helped Barclays to improve margins in its UK retail business, where total income rose 19% to almost £2 billion.
Group deposits rose by about £10 billion in the quarter, while rivals including Deutsche Bank AG saw declines. A liquidity crisis started by Silicon Valley Bank in the US sent clients fleeing to safety.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.