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LONDON (Alliance News) - Barclays PLC on Thursday reported a slip in first quarter profit due to a "challenging income environment" for the Corporate & Investment Bank, but was able to post a positive rate of return.
The lender reported pretax profit for the three months ended March of GBP1.48 billion compared to a GBP236 million loss a year before.
However, excluding litigation and conduct costs, Barclays' pretax profit decreased 11% to GBP1.54 billion from GBP1.73 billion a year ago.
The lender attributed this drop to a "challenging income environment" for its Corporate & Investment Bank, and an increase in impairments on "the non-recurrence of a favourable US macroeconomic forecast update" compared to the first quarter of 2018.
Barclays' credit impairment charges increased 56% to GBP448 million from GBP288 million the year before. The bank noted a 6% appreciation of the US dollar against sterling benefited profit in the quarter.
Barclays' total income was down 2.1% at GBP4.25 billion in the quarter, with net operating income decreasing 5.3% to GBP4.80 billion from GBP5.07 billion.
Net interest income increased, however, rising 3.2% to GBP2.26 billion from GBP2.19 billion a year before.
The bank's total operating expenses decreased 38% year-on-year to GBP3.32 billion from GBP5.33 billion.
"Today we have announced that Barclays earned just over GBP1 billion of attributable profit in the first quarter of 2019, or 6.1 pence per share. Group return on tangible equity was 9.2% in spite of a mixed environment for global banks. Tangible net asset value increased 4p to 266p, which has now grown in each of the last four quarters," said Chief Executive Jes Staley.
Barclays first quarter cost-to-income ratio improved significantly to 63% from 99% a year prior.
Barclays said its common equity tier one ratio at the end of the first quarter edged up to 13.0% from 12.7% a year before. The lender's return on tangible equity in the quarter was 9.2% compared to the negative 6.5% reported for the corresponding period a year earlier.
Looking forward, the Barclays maintained its 2019 and 2020 return on tangible equity targets. The lender is targeting above 9% for 2019 and above 10% for 2020.
Barclays is maintaining its cost guidance for 2019 of between GBP13.6 billion and GBP13.9 billion but noted if the "challenging income environment" seen in the first quarter persists, it will lower its cost target below GBP13.6 billion.
