Shares in Barclays PLC (LSE:BARC), which reports results on Tuesday 24 October, are pretty much exactly where they were a year ago, even though interest rates are decidedly not and profits have been solid for the past two years.
For the third quarter, the City is expecting pre-tax profit of roughly £2.0 billion, flat compared to second quarter of this year and roughly the same as the third quarter of last year.
This is despite slowing loan growth and lower client activity at the investment bank, amid a dearth of flotations and low merger & acquisition activity, especially in the UK, said analysts at AJ Bell, though they noted Barcklay was one of the four investment banks to lead the ARM Holdings flotation on the New York Stock Exchange in September.
Loan growth has slowed down in the past few quarters in the face of higher interest rates, the AJ Bell analysts noted, with deposits shrinking year-on-year in the second quarter, the first drop since late 2018.
Net interest margins at Barclays UK were 3.22% in the previous quarter, with management suggesting further improvement is unlikely.
Loan losses have started to creep up from historic lows, with an impairment charge of £372 million in the second quarter taking the first half total to £896 million or a ratio of 0.44%, versus full year guidance of a loan loss ratio of 0.5-0.6%.