Barclays profits down 12% amid sluggish mortgage demand

Barclays profits down 12% amid sluggish mortgage demand
  • PublishedApril 26, 2024

The high street banking giant reported a group pre-tax profit of £2.3bn for the first three months of 2024, down from £2.6bn the year before.

Barclays has reported a 12% fall in profits for the first three months of the year after mortgage lending and deposits dipped.

The high street banking giant reported a group pre-tax profit of £2.3bn for the quarter, down 12% from the £2.6bn it made during the same period last year.

However, the figure was slightly above analysts’ expectations of £2.2bn, helping Barclays shares to rise more than 4% in early trading on Thursday.

It comes after rival Lloyds Banking Group reported earlier this week that its pre-tax profits fell 28% during the same period.

Barclays said income from its UK operations fell 7% year-on-year amid subdued mortgage lending, with customer deposits also dipping by 2%.

The bank’s finance chief Anna Cross said the results partially reflected “seasonal” factors, including people paying off credit card and tax bills at the start of the year.

“We see continued conservative behaviour as a financial matter, so they continue to seek higher savings rates and secure their mortgage financing early,” she said.

However, Ms Cross said customers moving money into accounts with higher returns was a trend that has “definitely slowed down” since the end of 2023.

Barclays group chief executive CS Venkatakrishnan said the bank was “focused on disciplined execution” of cost-saving plans, including around £1bn in efficiency cuts this year.

The bank aims to make a total of about £2bn worth of savings by 2026, including by reducing the company’s reliance on its investment banking arm.

It also plans to sell its Italian retail mortgage book in the second quarter of this year.

Max Georgiou, an analyst at investment research firm Third Bridge, said the saving targets would be “challenging” unless more jobs were cut this year.

Last year Barclays axed 900 roles in the UK as part of a shake-up in the run-up to Christmas, according to Unite.

In February, the company also announced it had clinched a deal to buy most of Tesco’s banking arm in a move worth up to £1bn.

SOURCE: SKYNEWS

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