Third quarter profits at Barclays PLC (LON:BARC) came in ahead of expectations, pushing the shares higher in a falling market.
Pre-tax profits rose 35% from a year earlier to £837mln, while stripping out one-off items boosted profits to £1.7bn from £1.4bn in the third quarter of last year.
The payment protection insurance mis-selling issue shows no signs of going away, with the bank setting aside a further £600mln in the third quarter to cover potential claims.
Net interest income at Barclays UK clocked in at £1.5bn, while the investment banking arm (Barclays International) weighed in with £947mln.
“At a divisional level, Barclays UK reported adjusted profit performance that was in line with expectations, but Barclays’ Corporate & International (which includes investment banking), Head Office and Non-Core were all ahead,” noted Gary Greenwood at brokers Shore Capital.
“We think that a good proportion of the outperformance is likely to have been currency driven given the group’s significant exposure to dollar income while strong performance of the investment bank (a theme seen elsewhere in the industry during Q3) also helped,” he added.
The group’s chief executive, Jes Staley, said the picture in the third quarter was one of strong progress in fulfilling the group’s strategic objectives of strengthening the core businesses; closing down non-core businesses as quickly as possible; selling down its stake in Barclays Africa to the point where it be deconsolidated from the accounts; eliminating costs; dealing with legacy issues; and meeting state capital requirements.
“Our Core businesses are performing well, Non-Core rundown is approaching the final lap toward closure, we are on top of costs, and our capital position is resilient with strong reasons for confidence in meeting our end state target,” Staley said.
“The growing momentum in attaining our strategic goals means we can feel optimistic of our prospects of completing the restructuring of Barclays - a restructuring to a simplified transatlantic, consumer, corporate and investment bank with the capacity to deliver sustainable high quality returns for shareholders. This quarter has seen us take another important stride toward that state," he said.
Shares were up 0.6% at 182.9p in early deals, whereas the Footsie was off 0.5%.