Barclays and HSBC buildings can be seen during the coronavirus disease (COVID-19) outbreak in London, United Kingdom on October 20, 2020.
Matthew Childs | Reuters
LONDON – Barclays beat earnings expectations for the second quarter on Wednesday and increased returns for shareholders, with investment banking and equities posting record earnings.
The UK lender posted quarterly attributable profit of £ 2.1 billion (US $ 2.9 billion), up from £ 90 million in the second quarter of 2020. Analysts had expected net income of £ 1.7 billion for the three months to the end of June Refinitive data.
Stock and investment banking fees rose 38% and 27%, respectively, in the second quarter.
Barclays also announced increased capital returns to shareholders, with a half-yearly dividend of 2p per share and another share buyback of up to £ 500 million.
The bank also saw a significant decrease in loan loss provisions, as detailed in its earnings report for the first quarter, and released nearly £ 800m from its loan loss provisions, as opposed to the £ 1.6bn charge incurred over the same period of. was incurred in 2020.
“Our profitability, strong capitalization and balance sheet have enabled us to increase capital returns to shareholders,” said CEO Jes Staley in a statement, adding that the bank is seeing a revival in its businesses.
“Our Corporate and Investment Banking (CIB) business is well positioned to benefit from continued growth in debt and equity markets, with global markets and investment banking fee income increasing 36% since 2019 benefiting from a recovery in consumers . “
Barclays shares rose 4.7% in early trading.
Further highlights of the quarter:
- Consolidated sales reached 5.4 billion pounds, a fraction more than 5.34 billion pounds a year earlier.
- The CET 1 ratio, a measure of the solvency of banks, was 15.1%, compared to 14.2% in the previous year.
Fixed Income, Currencies and Commodities (FICC) trading business declined 37% in the first half compared to a record year 2020 as market volatility caused by the coronavirus led to an increase in trading volume.
Barclays previously announced that costs in 2021 will rise year-over-year due to coronavirus-related expenses, a property review, other structural cost measures, and salary increases.