Barclays PLC (LSE:BARC) made an attributable profit of £1.4bn in the first quarter despite coughing up £0.5bn to set right its embarrassing structured finance product fiasco.
Group income rose 10% to £6.5bn from £5.9bn the year before, driven by a strong performance by the Corporate and Investment Banking (CIB) division.
Profit before tax clocked in at £2.2bn, down 7% from £2.4bn the previous year. Attributable profit – post-tax profit after payments to non-controlling interests and other equity instrument holders – fell 18% to £1.4bn from £1.7bn but was slightly ahead of expectations of around £1.32bn. In view of the £0.5bn of litigation and conduct charges in the first quarter, it now expects total operating expenses in 2022 will be around £15bn.
READ: Barclays' structured product gaff continues to reverberate
The bank’s CET1 ratio – a measure of balance sheet strength – eased to 13.8% from 15.1% in the final quarter of 2021.
The company said it continues to target a return on tangible equities of more than 10% in 2022 and a CET1 ratio of between 13% and 14%,
While acknowledging geopolitical uncertainty and cost of living pressures, the banking group said the impairment charge is expected to remain below pre-pandemic levels in coming quarters given reduced unsecured lending balances and appropriate coverage ratios.
"A strong Q1 performance demonstrated Barclays' ability to deliver broad-based income growth across all operating businesses,” claimed CS Venkatakrishnan, the group’s chief executive officer.
“Our income growth was driven partly by Global Markets, which has been helping clients navigate ongoing market volatility caused by geopolitical and economic challenges including the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK.
“We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs. We will support them through this difficult period wherever we can, and support the wider economy just as we did through the COVID-19 pandemic.
“We remain focused on our three strategic priorities as the year progresses: delivering next-generation, digitised consumer financial services, producing sustainable growth in the Corporate and Investment Bank (CIB), and capturing opportunities as we transition to a low-carbon economy," he concluded.