Barclays’ net profit surged to £1bn in the fourth quarter, as it marked a year since chief executive CS Venkatakrishnan unveiled his three-year plan to revamp the British bank.
Profits beat analyst expectations of £989mn and were up from the same period last year when Barclays posted a net loss of £111mn. Group revenue was up 24 per cent to £7bn, compared with the £6.7bn analysts anticipated.
Last February, Barclays laid out a plan to secure growth and return £10bn to shareholders by focusing on the UK market and limiting the amount of capital consumed by its investment bank.
The division has nevertheless provided a boon to Barclays’ earnings as equities and fixed income traders benefited from market volatility in the US ahead of the election.
Income from equities trading was up 40 per cent year on year to £604mn, while fixed income trading income rose 29 per cent to £934mn.
Barclays also reported a 22 per cent increase in investment banking fees. Its debt capital markets business posted a more muted performance, with income up 9 per cent, which the bank attributed to less participation in investment grade issuance.
However, Barclays also set aside £90mn to cover the costs of a probe and related court ruling into the potential mis-selling of car finance loans, a market the bank said it had fully exited in 2019. The update came after Close Brothers said on Wednesday it expected to book a £165mn provision in its half-year results for the same purpose.
Barclays shares fell 4.7 per cent in early trading in London.
“Overall a solid set of results, but little new to get excited about either,” wrote Citibank analyst Andrew Coombs. “This, plus the strong run up in the share price over the past year, may temper any initial reaction.”
