The lender posted pre-tax profits of £2.2 billion for the first three months of 2022, down from £2.4 billion a year ago.
28 April 2022
Banking giant Barclays has posted a 7% fall in quarterly profits as it flagged tough conditions faced by households and businesses amid the cost-of-living crisis.
The lender posted pre-tax profits of £2.2 billion for the first three months of 2022, down from £2.4 billion a year ago, although the result was better than expected.
It booked a charge of £141 million for borrower arrears, more than double the £55 million a year ago as the cost-of-living crisis begins to hit customers.
But the group said arrears are set to remain lower than those seen before the pandemic thanks to lower levels of more risky unsecured lending.
Costs in the quarter jumped to £4.1 billion from £3.6 billion a year ago as it put by around £500 million following regulatory probes, most recently having admitted to selling more products to investors in the US than it was allowed to.
The group said it now expects costs for the full year to reach about £15 billion.
CS Venkatakrishnan, chief executive of Barclays, said: “We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs.
“We will support them through this difficult period wherever we can, and support the wider economy just as we did through the Covid-19 pandemic.”
Barclays nudged up its outlook for the UK economy this year and next thanks to improved unemployment expectations, now forecasting 2022 growth of 5.7% and 2.5% in 2023, against previous expectations of 4.9% and 2.3%.
But it said: “Uncertainty persists. The ongoing geopolitical situation could put further pressure on already high levels of inflation which may weigh on corporate profitability and consumer affordability levels. In addition, Covid-19 infection rates have started to increase across the globe which could result in (among other things) labour shortages and supply chain constraints.”
The group recently halted a planned £1 billion share buyback temporarily due to the expected £450 million hit from the US investigation over structured note sales, although it reiterated on Thursday that it would restart this “as soon as practicable” after the issue is resolved.
