The lender reported pre-tax profits of £4.2billion for the first six months of 2024, down from £4.6billion a year earlier, but better than expected thanks to a strong performance in its investment bank.
Barclays, the banking giant, has disclosed an 8% decrease in half-year profits.
However, it has raised its full-year outlook for a key performance indicator and announced additional returns for shareholders. The bank reported pre-tax profits of £4.2billion for the first six months of 2024, a drop from £4.6billion the previous year, but better than anticipated due to a robust performance in its investment bank. In the second quarter, profits fell by 1% to £1.9 billion.
It allocated another £897million for bad debts in the first half, up from £896million a year earlier, after setting aside £400 million during the second quarter. Nevertheless, the group increased its net interest income outlook for the full year to around £11billion, up from the previous guidance of about £10.7billion, partly due to a higher than expected interest rate outlook, with fewer cuts now expected.
Barclays said that as at the end of June, expectations were for just one UK rate cut in 2024, although forecasts now suggested two reductions by the end of the year. It also confirmed plans to repurchase another £750 million in shares in the third quarter and increased half-year dividends. Group chief executive CS Venkatakrishnan, also known as Venkat, stated that the bank was “making good progress on our three-year plan”.
He added: “We announced a half year dividend of 2.9p per share alongside a share buyback of up to £750million, with total capital distributions to shareholders of £1.2 billion in respect of the the first half of 2024.”
Barclays said it was on track to slash costs by around £1billion this year, after trimming another £400million in the first half. Group finance director Anna Cross said some jobs had gone as a result of the cost savings, but declined to give numbers and insisted the bank was hiring across divisions such as the corporate bank, private bank and wealth businesses.
Venkat added: “We are adding talent all over the UK.” The results showed net interest income – a key measure for retail lenders – fell 4% to £3.1billion in its UK banking arm over the half-year as higher interest rates saw mortgage lending drop and customers switch deposits to higher paying deposit accounts.
But its investment bank saw income rise 7% in the first half on the back of a 25% surge in its equities business.
