Barclays shares were up 1.4% to 143.9p in early morning trading on Thursday, after the company reported a 10% rise to £6.5 billion in group income in Q1 2022.
The financial institution announced a pre-tax profit of £2.2 billion and a return on tangible equity of 11.5% over the past quarter.
The banking firm also mentioned a cost-to-income ratio of 63% and a CET1 ratio of 13.8%, alongside a tangible net asset value per share of 294p, compared to 291p in Q1 2021.
Barclays said its attributable profit was £1.4 billion including litigation and conduct changes net of tax of £400 million, representing a £300 million drop from its £1.7 billion income in Q1 2021.
The company noted total operating costs of £4.1 billion, compared to £3.6 billion in Q1 2021, which encompassed litigation and conduct charges of £500 million linked to the over-issuance of securities by the institution in the US, alongside customer remediation costs due to a legacy loan portfolio.
“A strong Q1 performance demonstrated Barclays’ ability to deliver broad-based income growth across all operating businesses,” said Barclays Group CEO C.S. Venkatakrishnan.
“Group income was up 10% to £6.5bn, alongside profit before tax of £2.2bn and a RoTE of 11.5%.”
“Our performance includes the relevant costs relating to the over-issuance of securities in the US and customer remediation of a legacy loan portfolio.”
Barclays noted robust UK mortgage lending, strong UK and US consumer spending and payments volumes and tailwind from rising rates as contributing factors to the bank’s recovery in its consumer and payments business.
The company added that it enjoyed a strong CIB income as a result of strong FICC and equities performance with increased rates of activity as the financial group supported its clients throughout the market volatility of the past few months, sufficiently offsetting weaker investment banking fees as a consequence of a reduced fee pool.
The banking group confirmed credit impairment charges of £100 million, driven by low delinquencies and a benign credit environment, along with unsecured lending provision levels at an appropriate level in consideration of inflationary headwinds.
“Our income growth was driven partly by Global Markets, which has been helping clients navigate ongoing market volatility caused by geopolitical and economic challenges including the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK,” said Venkatakrishnan.
Barclays confirmed its target of a return on tangible equity over 10% during 2022, along with a total operating cost estimate of £15 billion and an expected impairment charge below pre-pandemic levels due to reduced unsecured lending balances and appropriate coverage ratios.
The banking company added that it would continue to target a CET1 ratio between 13-14%
The firm also said it would suspend its planned £1 billion share buyback scheme for a second time as a result of the over-issuance of US securities announced on 28 March 2022, with the company clarifying that it aimed to reinstate the buyback programme as soon as possible.
“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,” said Venkatakrishnan.
“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.”