Barclays H1 profits surge to £4.5bn but bad loan charges rise

27th Jul 2023 07:02

(Sharecast News) - Barclays became the second bank to post surging profits on the back of higher interest rates and lift its provisions for bad loans.

The bank posted a 22% rise in pre-tax profit for the six months to June 30 to £4.5bn, while bad loan charges increased to £900m from £341m. Barclays also announced a £750m share buyback deal, up on the £500m completed earlier.

Net interest margin - a key metric charting the difference between loan and savings rates, soared to 3.2% from 2.67% as savers continued to receive feeble returns on their deposits amid mounting accusations of "profiteering" in the sector.

Barclays said it now expected NIM to be less than 3.20%, with a current view of around 3.15%.

Income at the investment bank fell 22% to £3.2bn in the second quarter as trading in bonds and shares tumbled.

Chris Beauchamp at IG Group, said: "Once again the prospect of reduced interest income has hit banks, with Barclays in the firing line this morning. Even a buyback scheme and a solid rise in profits have not cheered investors, and while the shares are still up 20% from their March lows it seems today's results have not gone down well."

Reporting by Frank Prenesti for Sharecast.com