Barclays shows strong Q3 performance with profit before tax of £2.0bn and growth in all business lines
Barclays reported group income of £6.4bn, up 17% year-on-year, with continued momentum in both Consumer, Cards and Payments (CC&P) and Barclays UK.
Within Corporate and Investment Bank (CIB), strong client activity in Markets more than offset the impact of a reduced fee pool in Investment Banking. Group income benefited from the appreciation of USD against GBP.
Group operating expenses were £4.1bn, up 18% year-on-year. Within this, operating costs were £3.9bn, up 14% year-on-year driven by the appreciation of USD against GBP, impact of inflation and investment in the business.
Attributable profit was £1.5bn (Q321: £1.4bn) and RoTE was 12.5% (Q321: 11.4%).
Credit impairment charges were £0.4bn (Q321: £0.1bn). Delinquencies remained below historical levels and coverage levels have been broadly maintained at the portfolio level in light of an uncertain macroeconomic backdrop.
The deteriorating macroeconomic forecast resulted in an increased charge, partially offset by consuming economic uncertainty post-model adjustments (PMAs), which were established in prior periods in anticipation of the future deterioration, which is now captured within the modelled output.
Common Equity Tier 1 (CET1) ratio of 13.8% (December 2021: 15.1% and June 2022: 13.6%) and tangible net asset value (TNAV) per share of 286p (December 2021: 291p and June 2022: 297p).
Barclays paid a half-year dividend of 2.25p per share on 16 September 2022, and completed a share buyback of £0.5bn on 3 October 2022, bringing the total capital return equivalent to c.5.25p per share as announced at H122 results.
• Returns: targeting a RoTE of greater than 10% in 2022
• Income: diversified income streams position the Group well for the current economic and market environment including rising interest rates
• Costs: FY22 total operating expenses are expected to be in line with the outlook given at H122 results of around £16.7bn1, with a reduction in litigation and conduct charges of around £0.3bn broadly offset by headwinds from FX and other movements
• Impairment: expect the credit impairment charges at a portfolio level to trend towards a through-the-cycle loan loss rate, acknowledging the risk of further deterioration in the economic outlook
• Capital: targeting a CET1 ratio within the range of 13-14%
• Capital returns: capital distribution policy incorporates a progressive ordinary dividend, supplemented with buybacks as appropriate. Dividends will continue to be paid semi-annually, with the half