Barclays has reported a first quarter profit above expectations, hailing a resilient performance from its consumer bank.
The bank reported pre-tax profits of £2.6bn, above the average analyst forecast of £2.2bn, and higher than the £2.2bn it reported at the same time last year.
CS Venkatakrishnan, Barclays group chief executive, said the results showed a “strong” first quarter, adding: “The momentum across the group allows us to maintain a robust capital position, deliver attractive returns to shareholders and support our customers and clients through an uncertain economic environment.”
Income at the lender’s consumer, cards and payments division rose 47% to £1.3bn, thanks to rising credit card balances driven partly by its acquisition of a portfolio from retailer Gap last year.
But the bank’s bad loans provision for the quarter rocketed to £524m from £141m a year earlier, something it blamed mainly on its US cards business.
Investment banking presented disappointing results – income from global markets trading fell 8% and fees from advising on corporate mergers and fundraisings were down 7%.
Mergers and acquisitions activity was at its lowest in more than a decade, as rising interest rates and high inflation reduced appetite for deal-making.
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Richard Hunter, head of markets at interactive investor, said: “The deterioration in sentiment for the banks globally given the recent turmoil has affected the sector’s share prices, and Barclays is no exception despite its relative distance from the fray.
“The shares are down by 17% over the last three months, although over the last year the price remains ahead by 8%, as compared to a gain of 6% for the wider FTSE 100.
“The strength of these numbers and an unchanged outlook from the group will give some comfort to embattled investors, with the market consensus of the shares as a buy likely to remain intact.”
Shares ended the day more than 5% higher.