Hit hard by the ongoing economic uncertainty, Barclays has witnessed a significant decline in profits for the first quarter of the year. The banking giant reported a 12% decrease in pre-tax profits, dropping from £2.6 billion in the same period last year to £2.3 billion this year. The financial institution’s income from UK operations suffered a 7% year-over-year decline due to a subdued mortgage lending environment and reduced customer deposits. This trend reflects broader consumer behaviors as customers maintain lower account balances.
Barclays’ investment banking arm also felt the pinch, experiencing a 7% year-over-year income decline. While the equities division performed well, this was overshadowed by reduced activity in fixed income trading. Despite these setbacks, Barclays surpassed analysts’ expectations for the quarter, with predicted profits of £2.2 billion.
In response to these challenges, Barclays Group Chief Executive CS Venkatakrishnan emphasized the bank’s focus on disciplined execution of its cost-saving plan. The bank aims to achieve efficiency gains of approximately £1 billion this year, with an ambitious target of £2 billion in total savings by 2026.
Barclays is also taking proactive measures to strengthen its position. The bank has announced the sale of its performing Italian mortgage book and is investing heavily in its UK consumer businesses. One notable investment is the expected completion of the Tesco Bank acquisition in the fourth quarter, a move that is expected to further bolster Barclays’ UK operations.
