Barclays PLC (LSE:BARC) reported better-than-expected first-quarter profit supported by strong growth in its UK and credit card businesses which offset a flat performance in its investment banking arm.
The high street lender said pre-tax profit in the three months to 31 March 2023 reached £2.60bn, up 16% from £2.23bn a year ago, and above the company compiled consensus of £2.2bn.
CS Venkatakrishnan, group chief executive, said: "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."
Group income was £7.2bn, up 11% year on year, while EPS rose to 11.3p from 8.4p.
Barclays UK income increased 19% to £1.96bn, primarily driven by net interest income growth from higher rates and continued structural hedge income momentum, delivering a net interest margin (NIM) of 3.18%.
The FTSE 100-listed lender expects NIM to be greater than 3.2% in 2023, in line with previous guidance.
But Corporate and Investment Bank income only increased 1% to £4.0bn, although this was still a record first-quarter income performance.
Drivers included a strong performance in Transaction banking and Global Markets, against a record prior year comparative, with lower Investment Banking income due to a reduced industry fee pool.
Consumer, Cards and Payments income surged 47% to £1.31bn, reflecting growth in US cards balances, while group operating expenses were £4.1bn, in line with prior year, including the non-repeat of certain litigation and conduct items.
Credit impairment charges were £0.5bn, with a loan loss rate (LLR) of 52bps, within the guided range of 50-60bps, reflecting higher US cards balances and the continuing normalisation anticipated in US cards delinquencies.
The CET1 ratio dipped to 13.6% from 13.9% at the end of 2022, while tangible net asset value per share of 301p increased 6p since December 2022.
The bank is targeting a return on total equity of greater than 10% in 2023 and said its diversified income streams continue to position it well for the current economic and market environment, including higher interest rates.