Barclays reported a 12% rise in pre-tax profit to £2.3bn for the three months to the end of September, and announced a £500m share buyback. Earnings per share rose 18% year-on-year to 12.3p. The pre-tax figure was slightly below analyst expectations of £2.4bn.
The result came after a strong performance in equities and weakness in fixed income. Chief executive C. S. Venkatakrishnan said he was "pleased with the ongoing momentum of Barclays' operational and financial performance". The bank also confirmed plans to cut around 5,000 jobs this year.
EQUITIES OFFSET WEAKER FIXED INCOME
Total income in equities surged 47% to £1bn, which Barclays attributed to prior investment in prime financing and equity derivatives.
That helped to offset a 19% drop in income to £1bn in FICC (Fixed Income, Currencies, and Commodities). The bank said the fall reflected lower client activity in rates and credit into the second half of the quarter, and "further adversity" in September due to the macroeconomic environment.
Investment banking income dipped 3% to £1.1bn in the third quarter. The Investment Bank accounts for 43% of group revenues, against 31% for Barclays UK and 13% for the Barclays US Consumer Bank.
RETURNS AND TARGETS
Return on tangible equity (RoTE) rose to 11.7% in the third quarter from 10.6% in the same period a year earlier. Barclays said it was on track to deliver a RoTE greater than 12% in 2026.
With one quarter to go before the end of its original three-year plan, the bank said it had either achieved or was on track to achieve all of its 2026 group targets. It also said it was confident in and committed to the 2028 targets it set out earlier in the year, which include a RoTE of above 14%.
JOB CUTS TIED TO AI EFFICIENCIES
Barclays said the roughly 5,000 job cuts this year are intended to drive efficiencies through the use of AI. That equates to about 5% of the bank's 93,000 global staff, and executives confirmed they had already cut 1,000 workers since the start of the year.
Chief financial officer Anna Cross told reporters on Thursday that the job cuts were part of plans to save more than £1.1bn in 2027.
TAX AND REGULATORY PRESSURES
UK banks are bracing for a widely expected tax increase in next week's Autumn Budget. Separately, the Bank of England's Prudential Regulation Authority is pursuing an investigation linked to Barclays' private credit portfolio, following a reported probe into possible misrepresentation of risks.
The Bank of England is examining whether Barclays traders misrepresented illiquid private credit loans to understate their risk, after concerns were raised by an insider. Barclays said its £15 billion ($19.97 billion) private credit exposure was treated in line with accounting and regulatory capital requirements, following a report that the Bank was examining whether its traders had understated the risk.
Related: Bank of England examines Barclays private credit trades as shares fall 2.6%