Barclays reported net profit attributable to shareholders of GBP 1.24 billion for the second quarter of 2024, a seven per cent decline year-on-year. Total income for the quarter reached GBP 6.3 billion, up one per cent compared with the same period a year earlier, as performance in the Investment Bank more than compensated for ongoing pressure on the UK retail banking franchise. The results marked the second set of quarterly figures published under the group's revised divisional structure introduced as part of its three-year strategic plan.
The Investment Bank posted income of GBP 3.02 billion in the second quarter, a ten per cent increase year-on-year, driven by a 24% rise in equities income and a 44% jump in banking fees and underwriting income, which more than offset a 3% fall in FICC income.
BARCLAYS UK NET INTEREST INCOME
The Barclays UK division recorded a four per cent year-on-year decline in net interest income, although the net interest margin rose to 3.22% in the quarter from 3.09% in the first quarter (3.15% for the half year). Barclays attributed the decline to mortgage margin pressure and adverse product dynamics in deposits, as customers searched for higher yields, partly offset by structural hedge income.
Barclays said adverse deposit dynamics had improved in the second quarter and raised its 2024 Barclays UK net interest income target to about GBP 6.3 billion from about GBP 6.1 billion, and its group NII target (excluding the Investment Bank and Head Office) to about GBP 11.0 billion. The Bank of England cut Bank Rate on the same day as the Barclays results.
H1 RETURN ON EQUITY MEETS STRATEGIC TARGET
The group's half-year return on tangible equity of 11.1% satisfied the annual target of above ten per cent that Barclays had set as a key financial indicator within its three-year strategic plan, announced earlier in 2024. The strategic plan encompasses a restructuring of the group's business mix, the planned acquisition of Tesco Bank's retail banking business, expected to complete in November 2024, and a reallocation of capital across the five operating divisions that form the new group structure.
Management said it was making good progress on the three-year plan.
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