Barclays delays buyback as first-quarter profit drops

28th Apr 2022 07:25

(Sharecast News) - Barclays delayed its £1bn share buyback further as a £523m conduct charge caused the bank's first-quarter profit to fall.

Pretax profit dropped 7% to £2.23bn in the three months to the end of March from a year earlier as income rose 10% to £6.5bn. The decline was caused by the conduct charge which covered over-issuance of securities in the US and customer compensation costs for a separate matter.

Profit was well ahead of expectations. Analysts had on average expected pretax profit of £1.32bn but Barclays income growth was surprisingly strong, powered by its corporate and investment bank in volatile markets. Barclays shares rose 0.8% to 143.1p at 08:54 BST.

Barclays said on 28 March it issued billions of pounds more bonds in the US than it had agreed. As a result it pushed back its planned £1bn buyback to the second quarter. On Thursday the bank said it would delay the buyback until it had come to an agreement with the Securities and Exchange Commission. Barclays said it remained committed to the buyback.

Richard Hunter, head of markets at Interactive Investor, said: "On the whole Barclays has had a strong start to the year, although the fine relating to over-issuance of securities in the US has punched something of a hole in profits."

The FTSE 100 lender said the conduct charge combined with expectations for inflation and performance costs would lead to annual operating expenses of about £15bn. The bank's common equity tier 1 capital ratio shrank to 13.8% from 15.1% at the end of December.

C. S. Venkatakrishnan, Barclays' chief executive, said: "A strong Q1 performance demonstrated Barclays' ability to deliver broad-based income growth across all operating businesses. Our performance includes the relevant costs relating to the over-issuance of securities in the US and customer remediation of a legacy loan portfolio."