- July 02, 2018
Barclays reports 2018 Q1 financial results
Barclays reports record quarterly earnings.
- Profit before tax increased 4% to £1,413m resulting in a RoTE of 13.4% (Q117: 12.5%), reflecting double digit returns in both CIB and Consumer, Cards and Payments of 13.0% (Q117: 8.2%) and 15.6% (Q117: 36.4%), respectively.
- The 12% depreciation of average USD against GBP adversely impacted profits and income, and positively affected credit impairment charges and operating expenses.
- Total income decreased 8% to £3,808m
– CIB income increased 1% to £2,799m as Markets income increased 8% to £1,459m, partially offset by a decrease in banking income of 4% to £1,337m
– FICC income decreased 2% to £869m as a strong performance in foreign exchange was offset by a decline in credit
– Equities income increased 28% to £590m reflecting an improved performance in derivatives as a result of increased client activity and market volatility, and a strong performance in equity financing
– Banking fee income decreased 6% to £683m from a strong Q117. Global fee share increased across all products compared to Q417 and FY17
– Corporate lending declined 11% to £240m driven by the reallocation of RWAs within CIB and lower lending balances due to the realignment of clients between Barclays UK and Barclays International in preparation for structural reform, partially offset by lower losses on fair value hedges.
– Transaction banking increased 4% to £414m driven by higher average deposit balances.
– Consumer, Cards and Payments income decreased 26% to £1,009m driven by the non-recurrence of a £192m gain relating to an asset sale in US Cards and a £74m valuation gain on Barclays’ preference shares in Visa Inc. in Q117. Excluding these items, income declined 7% reflecting the impact of repositioning the US Cards portfolio towards a lower risk mix, partially offset by underlying growth in US Cards.
- Credit impairment charges decreased 73% to £93m
– CIB credit impairment charges decreased to a release of £159m (Q117: charge of £51m) primarily due to writebacks and updated macroeconomic forecasts.
– Consumer, Cards and Payments credit impairment charges decreased 15% to £252m due to the impact of repositioning the US Cards portfolio towards a lower risk mix and the improved macroeconomic forecasts in the US, partially offset by increased delinquency rates in US Cards. 30 and 90 day arrears rates within US Cards increased to 2.6% (Q117: 2.3%) and 1.4% (Q117: 1.2%), respectively
- Operating expenses decreased 5% to £2,315m
– CIB operating expenses decreased 8% to £1,786m driven by the reduction of restructuring and structural reform costs, and the reduced impact of the change in compensation awards introduced in Q416
– Consumer, Cards and Payments operating expenses increased 4% to £529m reflecting continued growth and investment
- RWAs increased to £214.2bn (December 2017: £210.3bn) due to increased trading activity
Re-disseminated by The Asian Banker