A decline in dealmaking by investment bankers at Barclays has helped to drag down quarterly profits at the FTSE 100 lender.
Pre-tax profits at the group slid by 12 per cent to just under £2.3 billion, knocked in part by a fall in profits at its investment banking arm to about £1.3 billion from £1.5 billion a year earlier.
Like Lloyds Banking Group, which released first-quarter results a day earlier, Barclays’s retail business in the UK also came under pressure from rising competition for mortgages and deposits, with profits slipping by 6 per cent to £705 million.
Barclays is one of Britain’s biggest lenders, with a significant high street operation in the UK, a big US cards business, and an investment bank that seeks to rival those on Wall Street.
However, it has long frustrated shareholders with its lacklustre stock market valuation, something that CS Venkatakrishnan, its chief executive who is known as Venkat, is seeking to rectify with a wide-ranging overhaul.
He set out his strategy to revamp the group in February, when he revealed a plan to return at least £10 billion to shareholders over three years, cut costs and lift annual revenues to £30 billion by 2026.
“We are focused on disciplined execution of the plan,” Venkat said today.
As part of this, Venkat plans to allocate an extra £30 billion in risk-weighted assets to the UK over three years. This includes £8 billion through a £600 million deal to acquire most of Tesco’s retail banking operations, which Barclays announced in February. On Wednesday evening, it also announced it was selling its €3.3 billion Italian mortgage portfolio at a €260 million pre-tax loss.
Overall group revenues in the three months to the end of March slipped 4 per cent to about £7 billion, with income at its investment banking division down 7 per cent at £3.3 billion. Within the division, a “strong performance” from equities trading was overshadowed by a weaker performance in fixed income, currencies and commodities and a 30 per cent slump in fees for advising on deals.
