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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."

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