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25 Apr 2019 | 07:32

Barclays profits slip in Q1 amid challenging backdrop for investment bank division

Barclays reported a decline in first-quarter pre-tax profit amid a slip in total income owing to a challenging income environment for its corporate and investment bank division. For the three months to 31 March, pre-tax profits fell to £1.5bn from £1.7bn a year earlier and total income fell 2% to £5.25bn. That missed expectations from Jefferies International for flat of total income of £5.4bn. Operating decreased 3% to £3.3bn and earnings per share fell to 6.3p from 7.1p from a year earlier. Corporate and investment bank income fell 11% to £2.51bn for the quarter, from £2.8bn a year earlier, reflecting reduced client activity, lower volatility and a smaller banking fee pool across the industry. That beat expectations for a decline to £2.4bn. Its common equity tier one ratio, a key benchmark of financial strength, fell to 13.0% for the quarter from 13.2% seen a year earlier.

The group return on tangible equity, excluding litigation and conduct, was 9.6% with earnings per share of 6.3p. "Today we have announced that Barclays earned just over £1bn of attributable profit in the first quarter of 2019, or 6.1 pence per share," said James E Staley, Group Chief Executive Officer. "Group profits before tax were £1.5bn, with positive jaws driven by a 3% reduction in costs, excluding litigation and conduct." "Our Corporate and Investment Bank achieved a RoTE of 9.5%, compared to 13.2% in Q1 of 2018. From a revenue perspective, we had a weak quarter in investment banking fees." "What you see in the first quarter is Barclays using this discretion around variable compensation to manage our costs and deliver expected profitability."

Story provided by StockMarketWire.com
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