Last checked at 
* Group income jumps by 20% as investment bank rallies
* Bank sets aside 2.1 bln stg to cover loan losses
* Sticks to longer-term returns targets
* Pandemic will change how and where staff work- CEO
(Adds shares, comment, details)
By Lawrence White and Sinead Cruise
LONDON, April 29 (Reuters) - A stellar performance from
Barclays' investment bank in the first quarter helped
to soften a blow to the bank's profits from a 2.1 billion pound
bad debt provision to cover loan losses from the coronavirus
crisis.
The British bank booked first-quarter pretax profits of 923
million pounds on Wednesday, down 38% from 1.5 billion pounds
($1.87 billion) in the first quarter of 2019 and shy of the 1.27
billion pounds average of analysts' forecasts compiled by the
bank.
Barclays said the impact of the coronavirus hit late in the
first quarter and was likely to linger, striking a less positive
tone than Standard Chartered which earlier on Wednesday
reported a 12% dip in profit for the period.
"Given the uncertainty around the developing economic
downturn and low interest rate environment, 2020 is expected to
be challenging," Chief Executive Jes Staley said.
The impairments number included a 405 million pound hit from
single name wholesale loan charges, while charges in its
consumer, cards and payments division nearly trebled to 885
million pounds from Dec. 31, as the deteriorating economic
situation increased the chances of customers missing payments.
The coronavirus outbreak has hit Barclays' credit card
business particularly hard, with spending in Britain and the
United States in the last week of March just half the volumes
seen in the same period a year ago.
Barclays said group income rose by 20% to 6.3 billion
pounds, boosted by a surge in investment bank activity where
pretax profits leapt by 42% to 1.2 billion pounds.
DIVERSITY
The strong investment bank performance bolsters Barclays'
strategy of maintaining a diversified business model, which
Staley has consistently argued as a route to recession-proof
returns.
The division, known as Barclays International, generated a
44% rise in income to 3.6 billion pounds, with the fixed income,
currencies and commodities unit reporting a 106% income bounce
as it cashed in on sharp swings in global markets.
Income at its markets business rose by 77% to 2.4 billion
pounds, a record quarterly performance likely to undermine a
campaign led by Barclays top shareholder Sherborne Investors
to shrink the investment bank.
Equities generated a 21% rise in income while banking fees
climbed by 12%.
"Since the financial crisis universal banking has been out
of favour. However, Barclays’ results are a good demonstration
of why tying high street and investment banking together can pay
dividends," said Nicholas Hyett, Equity Analyst at Hargreaves
Lansdown.
Barclays shares were 6.4% higher at 104 pence at 0908 GMT.
CORONAVIRUS HIT
Banks like Barclays have been key to UK government efforts
to keep British businesses and households afloat during the
COVID-19 pandemic by slashing charges, dispensing billions of
pounds of state-backed loans and granting debt repayment
holidays.
As at April 24, Barclays said it had lent 737 million pounds
via the Coronavirus Business Interruption Loan scheme, approved
over 238,000 mortgage and loan payment holidays, and waived
overdraft and business banking charges for more than 6 million
customers.
Despite the tougher economic environment, the bank said it
still believed its return on tangible equity target of greater
than 10% remained appropriate over time. It delivered a group
ROTE of 5.1% over the first quarter, while the investment bank
chalked up 12.1%.
Staley said the coronavirus pandemic could permanently
change how many bankers make the daily trudge into tightly
packed city centre offices.
"There will be a long term adjustment in how we think about
our location strategy ...the notion of putting 7,000 people in a
building may be a thing of the past," he told
reporters.
($1 = 0.8039 pounds)
(Additional reporting by Iain Withers. Editing by Jane Merriman
and Richard Pullin)
