So, like, guess what? British bank Barclays totally crushed it in the first quarter, beating expectations on both the top and bottom lines. Pre-tax profit soared to £2.7 billion ($3.6 billion), which is an 11% jump from last year. Analysts were only predicting around £2.49 billion, but Barclays was like, “Hold my tea,” and brought in £7.7 billion in group revenues, way above the projected £7.33 billion.
The investment banking division was the real MVP, raking in a cool 16% increase in income to £3.87 billion. Barclays’ return on tangible equity hit 14% in the first quarter, up from a measly 7.5% in the December quarter. Shares were also up by 2% in early London trading, so it’s all rainbows and unicorns for Barclays, right?
Well, not really sure why this matters, but investors are super curious about how Barclays plans to handle its exposure to the U.S. market amidst all the chaos caused by President Donald Trump’s trade tariffs. Barclays has been playin’ in the U.S. sandbox ever since they snatched up Lehman Brothers’ business for a cool $1.75 billion. CEO C.S. Venkatakrishnan told CNBC that he’s expecting some crazy market volatility in the future. Like, strap in folks, it’s gonna be a bumpy ride.
But hey, Barclays is all about that risk management game. They’re turning market volatility into profits, especially in fixed income trading. Venkatakrishnan is like, “We got this, we’re ready for anything.” He even mentioned something about economic uncertainty making everyone hesitant to make decisions. People be taking forever to pull the trigger on stuff. So, Barclays is gearing up for whatever comes their way, including potential economic slowdowns in the UK and the US.
Barclays’ U.S. consumer bank is making moves, showing a 9.1% return on tangible equity in 2024 compared to a sad 4.1% in 2023. Income crept up 1% to £864 million in the first quarter, but pre-tax profit took a little dip down 7% to £55 million. Not the end of the world, right?
According to the folks at RBC Capital Markets, Barclays’ profit beat was driven by income but got a bit of a smackdown from higher-than-expected impairments. The bank’s U.S. consumer and investment banking ventures might drag down the stock until this whole global trade war thing chills out a bit. Barclays’ shares took a nosedive when the White House started flexing its trade war muscles on April 2, but they managed to bounce back and are up over 10% for the year. Unlike UBS, who’s probably crying in a corner somewhere.
Back in the UK, Barclays’ consumer bank unit is living its best life with a 12% income increase to £484 million and a whopping 23% jump in pre-tax profit to £207 million. Thanks to their buyout of Tesco Bank, things are looking pretty sweet.
So, here’s the deal – Britain might actually benefit from splitting up with the European Union. The EU got hit with a 20% tariff from the US, while London only has to deal with 10%. They’re trying to use their special relationship with the US to score a better trade deal. But, with global trade slowing down, things could get a little hairy.
Barclays isn’t the only one dealing with changes. HSBC is shaking things up by axing its M&A and equity capital markets businesses in the UK, US, and Europe. Santander UK is also revamping, with plans to cut jobs and close branches. Looks like everyone’s trying to stay ahead in this crazy game of banking.
So, that’s the scoop on Barclays and the wild world of banking. Who knows what’s coming next? Maybe it’s just me, but it feels like things are about to get even crazier.
