Barclays profits more than double to £1.7bn as it plans extra 2,000 jobs

Rebecca Smith
It has been a bumper week for banks
It has been a bumper week for banks (Source: Getty)

Barclays posted bumper profits for the first quarter of £1.7bn, more than doubling the figure from the same time last year.

It has also announced it hire 2,000 members of staff over the next three years, for roles focused on technology.

However, shares fell 3.75 per cent in early trading to 215.55p after the bank also announced it was booking a one-off £884m charge on its Africa business.

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The figures

Group profit before tax rose to £1.7bn in the three months to the end of March, more than double the figure for the same period last year, and 15 per cent higher than analysts expected. That was despite the bank booking a one-off charge on its Africa business.

Barclays said its core businesses continued to perform "very well", producing a combined return on tangible equity of 11 per cent.

The company's cost to income ratio also improved to 62 per cent, from the 76 per cent it posted for the first quarter of last year.

However, credit impairment charges grew 19 per cent to £527m.

Why it's interesting

Analysts had expected the bank to benefit from foreign exchange tailwinds and market share gains, but its results topped expectations.

Barclays has faced heightened scrutiny of late, with chief executive Jes Staley likely to face questions over a Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) investigation into his attempts to identify a whistleblower.

It marks a positive week of results for banks, with Lloyds also posting impressive numbers yesterday, while RBS said this morning it had swung to a £259m profit.

What the company said

Chief executive Jes Staley said:

This has been another quarter of strong progress towards the completion of the restructuring of Barclays.

On Africa, we await approval for the separation arrangements already agreed with local management, following which we will be able to make further progress towards regulatory deconsolidation.

We are now just two months away from completing the restructuring of Barclays as a transatlantic consumer, corporate and Iivestment Bank and there is further good reason in this quarter’s performance to feel optimistic for our prospects.

The analyst's take

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said:

The wind down of the bad bank is approaching completion, cost control seems to be in hand, and the UK is showing resilience.

However, there is disappointment too. Chief among them is the poor performance from the investment bank’s markets division, which saw income fall four per cent compared with nine per cent growth at Deutsche Bank and a 15 per cent rise among the big five US banks.

The Staley vision makes a transatlantic investment bank the second pillar of the Barclay’s stripped down, two-pronged approach. If that approach is going to deliver results, the bank really needs to show that it can keep up with the big boys and grab a slice of the action when times are good.

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