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Barclays' first-quarter earnings beat forecasts as coronavirus volatility push its markets division's earnings up 77%

jes staley 2011
  • Barclays posted first-quarter earnings that beat Wall Street forecasts.
  • The banking giant's markets income surged 77% to a quarterly record of £2.4 billion ($3 billion) as fixed income, currencies, and commodities income more than doubled.
  • However, Barclays took a £2.1 billion ($2.6 billion) impairment charge to reflect the impact of the pandemic.
  • "Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging," CEO Jes Staley said in the earnings release.
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Barclays posted first-quarter earnings that beat the expectations of analysts polled by Bloomberg, as a record quarter for its markets segment helped to temper the impact of the coronavirus outbreak.
The British bank stomached a £2.1 billion ($2.6 billion) impairment charge to reflect the fallout from the pandemic, driving its net income down 13% to £4.2 billion ($5.2 billion). Return on average tangible shareholders' equity also slid from 9.6% to 5.1%, well below the bank's target of 10% over time.
Here are the key numbers:
Revenue: £6.28 billion ($7.83 billion) versus the £5.34 billion ($6.66 billion) estimate.
Earnings per share: £0.035 ($0.044) versus the £0.033 ($0.04) estimate
"The impact of COVID-19 came late in what was until that point a good quarter," CEO Jes Staley said in the earnings release.
"Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging," he added.
Pre-tax profits slumped 67% in Barclays' UK business, reflecting lower income in the Barclaycard consumer and business banking subdivisions and a £481 million ($600 million) impairment charge.
In Barclays' international segment, markets income surged 77% to a quarterly record of £2.4 billion ($3 billion) as fixed income, currencies, and commodities income more than doubled.
However, that was offset by a six-fold rise in impairment charges to £1.6 billion ($2 billion), which pushed the segment's pre-tax profits down 26% to £822 million ($1.02 billion).
Barclays' stock jumped more than 5% in early European trading after the results.
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