Barclays beats profit forecasts but cover for bad loans rises
The banking giant was ahead of expectation with a pre-tax profit of £1.9 billion in the latest quarter.
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Your support makes all the difference.Barclays has beaten profit expectations for the latest quarter but revealed it set aside more than £430 million to cover expected loan losses.
The banking giant said it made a pre-tax profit of £1.9 billion in the three months to September, coming in slightly ahead of analysts’ expectations but below last year’s £2 billion profit.
Higher interest rates and weaker house prices prompted the bank to increase its credit impairment charges to £433 million for the period, up from £381 million last year.
The increase came despite the proportion of people falling behind on loan repayments remaining low, it said.
Barclays revealed that income from its corporate and investment banking division fell by 6% year on year as volatility in the financial markets led to lower customer activity.
Income across the bank was down by 2%, which it said partially reflected the merger of two divisions, offsetting higher borrowing costs boosting income in the UK.
CS Venkatakrishnan, Barclays’ group chief executive, said the bank was managing credit well and remaining “disciplined” on costs.
“We see further opportunities to enhance returns for shareholders through cost efficiencies and disciplined capital allocation across the group,” he said.
He added that it is set to provide revised financial targets within its full-year financial results.