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Barclays beats market forecasts

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Barclays (LON:BARC) posted underlying pre-tax profit of £2.45 billion for its first quarter, beating analyst forecasts as its bosses gear up for a possible shareholder revolt at tomorrow’s AGM.

The bank’s  pre-tax profit increased 22 per cent and came in comfortably ahead of the £1.96 billion forecast by analysts in the quarter to March.

Barclaycard was strong alongside wealth and investment management and UK retail and business banking.

Barclaycard profits improved by 18 per cent to £349 million, while profits in Europe declined 27 per cent to £43 million. 

Chief executive Bob Diamond said: “Barclays first quarter results are an encouraging start to the year and demonstrate continued progress across our execution priorities. 

Our strong mix of businesses, emphasis on serving customers and clients, and our focus on execution give me confidence in delivering on our return targets for shareholders."

However it reported a statutory pre-tax loss of £475 million in the first quarter compared to £1.66 billion profit a year ago due to £2.62 billion own credit reversal.

Barclays also said it experienced an increase in payment protection insurance (PPI) claims for which it spent an extra £300 million to compensate.

Excluding PPI provision, operating costs increased two per cent due to increased regulatory and legal costs. 

The company added: “We are pleased with the development of the competitive positions across our businesses and have improved our adaptability to the changing environment. 

“However, the continued challenging market conditions mean it is too early to establish the trend for the year.”

The underlying return of average shareholder’s equity increased to 12.2 per cent from 10.2 per cent in the same period last year. 

The quarterly dividend was held at one pence per share.

Last week, Diamond and finance director Chris Lucas agreed to a new performance measure, linked to an improvement in return on equity after fierce criticism by shareholders over the bank’s performance in 2011.

The share price increased this morning 1.8 per cent to 214.8 pence.

 

Quick facts: Barclays PLC

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Price: 185.8 GBX

Market Cap: £31.32 billion

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