Barclays plc (LON:BARC) has announced its Q3 2021 results.
The Group’s diversified business model delivered a record Group profit before tax of £6.9bn (Q320 YTD: £2.4bn), a return on tangible equity (RoTE) of 14.9% (Q320 YTD: 3.6%) and earnings per share (EPS) of 30.8p (Q320 YTD: 7.6p)
Key financial metrics:
|Income||Cost: income ratio||Profit before tax||RoTE||EPS||CET1 ratio|
·Strong Corporate and Investment Bank (CIB) performance: Investment Banking fees and Equities income had their best Q3 YTD on a comparable basis1 driving a CIB RoTE of 16.4% (Q320 YTD:10.5%)
·Ongoing consumer recovery and well positioned for a rising rate environment: continue to experience strong UK mortgage and deposit volumes. Although yet to translate into meaningful unsecured balance growth, positive trends in UK and US consumer spending and in payments volumes have been observed following easing of lockdown restrictions
·Investing for growth: reinvesting efficiency savings to drive income growth. Excluding structural cost actions and performance costs, Group total operating expenses were flat
·Net credit impairment release: £0.6bn Q321 YTD release driven by an improved macroeconomic outlook and benign credit performance
·Strong capital: Common equity tier 1 (CET1) ratio of 15.4%, above the target range of 13-14%
·Returns: expect to deliver a RoTE above 10% in 2021
·Impairment: the impairment run rate is expected to remain below historical levels in coming quarters
·Costs: excluding structural cost actions and performance costs, FY21 costs are expected to be c.£12bn2. The Group is evaluating planned structural cost actions for Q421
·Capital: the CET1 ratio is expected to remain above the target range of 13-14% at 31 December 2021
·Capital returns: maintaining a progressive ordinary dividend policy and additional cash returns, including share buybacks, as appropriate
1 Period covering Q114 – Q321. Pre 2014 financials were not restated following re-segmentation in Q116.
2 Group cost outlook is based on an average rate of 1.38 (USD/GBP) in H221 and subject to foreign currency movements.
James E Staley, Barclays Chief Executive Officer, commented
“On top of a good first half, a strong third quarter performance means Barclays has delivered its highest Q3 YTD pre-tax profit on record in 2021, demonstrating the benefits of our diversified business model. We continue to support our customers and clients through the COVID-19 pandemic, have achieved a double-digit RoTE in every quarter year to date, and expect to deliver a full year RoTE above 10%. While the CIB performance continues to be an area of strength for the Group, we are also seeing evidence of a consumer recovery and the early signs of a more favourable rate environment. Against that backdrop, we are focused on balancing cost efficiencies with further investment into high-returning growth opportunities. Our CET1 ratio of 15.4% means we are also in a strong position to balance this growth with a key priority of returning excess capital to shareholders.”