British lender Barclays on Thursday said net profit slid 13 percent in the first quarter, as warning lights flashed over weaker mortgage lending and sliding customer deposits.
Profit after tax dropped to £1.6 billion ($2 billion) in the first three months of 2024, compared with £1.8 billion in the same period one year earlier, Barclays said in a results statement that also revealed lower income for its investment banking division.
Pre-tax profit fell 12 percent to £2.3 billion, but this beat market expectations of £2.2 billion.
UK operations were hit by “subdued mortgage lending” as a result of weaker market demand.
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Deposits declined on increased competition for savings accounts, as the Bank of England held its interest rate at a 16-year high of 5.25 percent despite slowing inflation.
Retail banks tend to mirror BoE action in their own loans and savings products. The central bank is widely tipped to start cutting rates this year.
Barclays added Thursday that its investment bank division, which accounts for about half of group revenues, posted a seven-percent drop in income.
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Investors took the earnings in their stride, sending Barclays’ share price up 4.2 percent at 199.04 pence.
“Barclays has shown stable rather than dynamic growth over the quarter, beating expectations on most measures,” noted Richard Hunter, head of markets at trading firm Interactive Investor.
He added, however, that “the performance of Barclays Investment Bank could lead to some investor disappointment” following recent strong numbers from US rivals Goldman Sachs and Morgan Stanley.
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