Barclays profits increase by more than 150 per cent as "early signs of recovery" appear

UK bank Barclays has announced that its profits increased by more than 150 per cent in the first quarter of 2021.

Barclays, headquartered in London, reported today (30 April) that its profits before tax rose by 162 per cent to £2,399m, up from £913m in the same period last year.

It also saw its net operating income increase by 40 per cent, rising from £4,168m last year to £5,845m.

This comes as the bank reports seeing “early signs of recovery” from the pandemic, with more economic activity across cards and businesses.

However, its total income dropped by 6 per cent, falling from £6,283m to £5,900m.

James E Staley, group CEO of Barclays, commented: “Since the early days of the pandemic last year, our diversified business has demonstrated the resilience critical to ensuring Barclays’ financial integrity.

“It gives us the capacity to step up for our customers, clients, colleagues and communities when they need our support the most, and deliver for our shareholders by staying profitable in every quarter.

“Our diversification continued to drive a strong performance, delivering a group RoTE (return on tangible equity) of 14.7 per cent in the first quarter of 2021. Group profit before tax increased to £2.4bn, contributing towards EPS of 9.9 pence.

“As was the case throughout 2020, within Barclays International, performance in the CIB was strong this quarter, achieving a RoTE of 17.9 per cent on income of £3.6bn, just 1 per cent down from our Q1 income performance last year, which was a very strong comparative.

“It also partially offset challenges in our consumer businesses that have been impacted by lower spend and activity levels as a result of the pandemic.

“Barclays UK generated income of £1.6bn in the quarter with lower impairment charges resulting in a RoTE of 12.0 per cent.

“Strong demand in mortgages and record completions drove organic net asset growth of £3.6bn which was our best ever single quarter. Our CC&P business generated an income of £805m and delivered a RoTE of 16.5 per cent.

“As we enter the next phase of this pandemic, we remain resolute in our commitment to support the economic recovery.

“From our spend data, which captures UK economic activity across our cards and acquiring businesses, we are already seeing encouraging early signs of recovery in some sectors, including those hit hardest by the crisis.

“While momentum in the consumer businesses, particularly card balances, will take time to build, Barclays secured significant new growth opportunities in Q1.

“We negotiated a new, long-term agreement to issue Gap’s co-branded and private label credit card programme in the US from May 2022.

“Following the launch of our point-of-sale finance partnership with Amazon in Germany last year, we have agreed to extend our Amazon partnership to the UK, a significant expansion of our franchise in Europe’s two largest consumer markets. Alongside existing partnerships including with Apple in the UK, it demonstrates the strength and potential of our consumer platform.

“More broadly across payments, we expect to realise around £900m of income growth opportunity over the coming three years.

“While evidence of recovery is encouraging, we have continued to take a cautious view of the impact of the pandemic on the business. We remain disciplined on costs, with a cost to income ratio of 61 per cent this quarter.

“Our capital position remains well above target with a CET1 ratio of 14.6 per cent and we completed our £700m buyback this month. We will give further guidance on distributions when appropriate.

“With a strong balance sheet and diversified business, Barclays remains well-positioned to support the economy and deliver for our shareholders.”