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Highlights
- Britain's leading investment bank Barclays Plc beat the expectation to register a 27% rise in the net profit.
- The revenue witnessed an 11% rise to £7.2 billion.
After Standard Chartered PLC (LON: STAN), Barclays Plc (LON: BARC) was the second big bank to announce its quarterly results on Thursday. Barclays PLC beat the expectation to register a 27% rise in net profit in what is deemed profitable for Britain's leading investment bank.
Following the quarterly results announcement, Barclays Plc on Thursday zoomed up by 5.32% and was trading at GBX 162.04 at market close. The FTSE 100 constituent has given its shareholders a 14.18% over the past year and 2.22% on a YTD basis. With an EPS of 0.38, the BARC enjoyed a market cap of £23,921.70 million as of Thursday.
The net profit of Barclays increased to £1.8 billion in the first quarter. This substantially increased from last year's £1.4 billion, thus beating market experts' expectations. Not just the net profit but also the revenue witnessed an 11% rise, taking the revenue to £7.2 billion from the £6.8 billion estimate.
The net profit was largely on the back of net interest income growth from higher rates as the Bank of England (BoE) had raised the interest rate to 4.25%. To top that, the interest seems to have been piqued by rumours that in its 11 May meeting, the BoE could raise the interest rate to 4.5% to fight inflation.
The rise in interest rates has increased the net interest margin to 3.18%. The mood is already positive, with other leading financial institutions like NatWest and Lloyds yet to announce their quarterly reports by next week.
Looking ahead to 2023, Barclays is confident that it will be able to meet all the targets set for 2023, as all performance metrics indicate the same ahead of its guidance in the first quarter. CS Venkatakrishnan, CEO of Barclays, felt that the momentum across the group allows the financial institution to maintain liquidity and deliver attractive returns to shareholders.
The results come at a turbulent period which saw the collapse of Silicon Valley Bank and other lenders and the takeover of Credit Suisse by the Swiss financial institution UBS. Although this period saw market volatility increase in the banking sector, the BoE feels that the UK UK banking system is much more resilient and is well capitalised and funded.
