Barclays shares surge 7% on £1.1bn profit

Barclays shares (LON: BARC) soared almost 8% on Friday after the group reported better-than-expected results in the third quarter.

In the three months to the end of September, the lender reported a pre-tax profit of £1.1bn – almost double analyst expectations for the period.

Income at the corporate and investment bank grew by 24% whilst markets income surged by 52%.

Barclays chief executive, Jes Staley, confirmed on Friday that he will be staying at the lender for a further two years. He said on a call to investors:  “I think we’ll be here another couple of years… It would be nice to be here in kinder winds.”

Staley said in the trading update: “In this historically challenging year for our customers and clients we have continued to provide huge support to help people through the social and economic impact of the COVID-19 pandemic. This remains a priority, alongside maintaining the financial integrity of the firm and keeping our colleagues safe.

“Barclays UK also returned to profitability in the third quarter, with profit before tax of £196m, as economic activity recovered from the spring low point and impairment charges reduced. For the first nine months Barclays UK delivered profit before tax of £264m. Income headwinds in Barclays UK are expected to persist into 2021 including the low interest rate environment.

Despite the positive results for Q3, the lender has said that outlook remains uncertain and subject to change depending on the evolution and persistence of the COVID-19 pandemic and the outcome of Brexit negotiations.

Michael Hewson, CMC’s chief market analyst, commented: “With all the questions being raised about the future of… Staley these numbers reinforce the case for keeping the investment bank operation intact, and helping to support the business in these difficult times.”

“This is one major advantage that Barclays has over Lloyds and NatWest Group, who report next week, in that continued outperformance in their investment banking division is likely to help them ride out the current uncertainty much better, and is already starting to be reflected in their share price.”

Barclays shares (LON: BARC) are +7.38% at 111,98 (1204GMT).