Barclays shares jump as investment arm cashes in on market storm
Barclays enjoyed a bumper first three months of 2025 as its investment and private banking arms cashed in on market volatility.
The bank’s share rose over 1.5 per cent during early trading on Wednesday.
The FTSE 100 giant’s investment bank bolstered income by 16 per cent to £3.9bn, compared to £3.3bn from the same period in 2024.
The lender’s private bank and wealth management business topped £349m – a 12 per cent jump.
This was driven by higher transactional activity in global markets after numerous share sell-offs ahead of President Donald Trump’s sweeping tariffs on trading partners.
Barclays recorded a loan loss rate – the percentage a lender believes loans will not be repaid – of 61 basis points and reserved a £74m provision for “elevated US macroeconomic uncertainty”.
This follows on from its FTSE 100 peer HSBC reserving extra bad loan funds in its first-quarter report on Monday.
The market volatility helped boost Barclays’ group income 11 per cent year-on-year to £7.7bn.
This offset a five per cent increase in operating expenses to £4.4bn.
The firm booked a £2.7bn pre-tax profit, ahead of the £2.5bn pencilled in by analysts.
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Barclays has quite comfortably beaten expectations, after its investment banking arm cashed in on market volatility over the first quarter.
“In the main, trends across the portfolio look strong, from stable US credit card write-offs to low default levels on UK cards and loans.”
Barclays beats wider interest woes
The bank’s net interest margin – a key metric for the firm’s profitability from lending – swelled 46 basis points to 3.55 per cent.
In the UK, Barclays’ income rose 14 per cent to £2bn.
Net interest income in the UK increased 18 per cent to £1.8bn.
Lenders’ interest income has taken a hit since the Bank of England whittled rates down to 4.5 per cent – from a previous post-financial crisis high of 5.25 per cent. But, Barclays appears to be weathering the storm.
The group raised its net interest income (NII) guidance, excluding its investment bank, to £12.5bn, from £12.2bn previously.
It also upped its UK NII guidance to £7.6bn from 7.4bn.
Britzman added: “Barclays UK had a solid quarter, despite some lingering pressure from higher cost deposits and tighter mortgage margins.
“Growth in its mortgage lending and strong income from the structural hedge suggest a healthy outlook for the broader sector.”
Barclays said it delivered a tangible return on equity of 14 per cent and was on track to meet full year 2025 and 2026 guidance targets.
C. S. Venkatakrishnan, the lenders’ chief executive, said: “Our high quality, diversified businesses, together with proactive risk, capital and liquidity management and a robust balance sheet, position us well to support our customers and clients and deliver strong risk-adjusted returns in a wide range of macroeconomic scenarios.
“We remain committed to and confident in delivering our previously announced financial and distribution targets for 2025 and 2026.”