Back to top

Image: Bigstock

Barclays (BCS) Records Y/Y Growth in Q3 Earnings & Revenues

Read MoreHide Full Article

Barclays (BCS - Free Report) reported third-quarter 2021 net income attributable to ordinary equity holders of £1.45 billion ($2 billion), up significantly from the prior-year quarter.

Results were aided by a rise in revenues, partly offset by higher operating expenses. The company recorded a decline in credit impairment charges in the quarter.

Revenues Improve, Expenses Rise

Net operating income was £5.35 billion ($7.37 billion), up 16.3% year over year. A decline in credit impairment charges along with higher net fee, commission and other income drove the top line.

Operating expenses (excluding litigation and conduct costs) totaled £3.45 billion ($4.76 billion), up 1.6% year over year.

Cost to income ratio was 64%, down from 67% recorded a year ago.

Credit impairment charges of £120 million ($165.4 million) declined 80.3% from the year-ago quarter.

Pre-tax income was £1.96 billion ($2.70 billion), up 71% year over year.

Segment Performance Solid

Barclays UK: Profit before tax was £451 million ($621.7 million), up significantly from the year-ago quarter. An increase in net operating income and lower expenses were recorded.

Barclays International: Profit before tax was £1.66 billion ($2.29 billion), up 42.2% year over year. The rise was driven by strong performances of both corporate and investment bank, and the consumer, cards and payments divisions.

Head Office: Loss before tax was £147 million ($202.6 million), narrower than the loss incurred in the prior-year quarter.

Balance Sheet & Capital Ratios Strong

Total assets as of Sep 30, 2021, were £1,406.5 billion ($1,892.9 billion), up 2.2% from the previous quarter end.

Total risk-weighted assets increased marginally from the prior quarter to £307.5 billion ($413.8 billion) as of Sep 30, 2021.

As of Sep 30, 2021, Common Equity Tier 1 (CET1) ratio was 15.4%, up from 14.6% as of Sep 30, 2020.

2021 Guidance

Barclays expects to deliver a return on tangible equity of more than 10%.

Management expects the quarterly impairment run rate to remain below historical levels.

Expenses (excluding structural cost actions and performance costs) are expected to be £12 billion.

The CET1 ratio is expected to be above the target of 13-14%.

Our View

Given Barclays’ restructuring and business-simplification efforts, its operating efficiency is expected to improve in the quarters ahead. However, given the tough operating backdrop, revenue growth might get hampered in the near term.

Barclays PLC Price, Consensus and EPS Surprise


Barclays PLC Price, Consensus and EPS Surprise

Barclays PLC price-consensus-eps-surprise-chart | Barclays PLC Quote

Currently, Barclays carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Foreign Banks

HSBC Holdings (HSBC - Free Report) and UBS Group AG (UBS - Free Report) are expected to report quarterly figures on Oct 25 and Oct 26, respectively.

Deutsche Bank Aktiengesellschaft (DB - Free Report) will report results soon.

Published in