Barclays reported an 18% rise in third-quarter profit, surpassing expectations and boosting its full-year income outlook. The British bank posted a pretax profit of £2.2 billion ($2.85 billion) for the July-September period, up from £1.9 billion a year ago, outperforming analysts’ forecasts of £1.968 billion.
The bank upgraded its net interest income forecast for 2024, now expecting to exceed £11 billion, rather than merely hitting that target. Barclays’ shares rose 1.8% following the announcement, outperforming the FTSE 100’s 0.5% rise.
Barclays cited slower-than-expected interest rate cuts and stronger investment banking prospects as key drivers of revenue growth. The bank now predicts three Bank of England rate cuts this year, with a final policy rate of 4.5%, revising its earlier forecast of five cuts.
Barclays’ UK business delivered robust returns, with third-quarter returns on tangible equity rising to 23.4%, while the private banking and wealth management units posted a 29% return. Investment banking revenues grew, with fixed income, currencies, and commodities revenue increasing 3% to £1.18 billion. Advisory fee income surged 133% to £186 million, while debt capital markets fees rose 48% year-on-year.
This earnings boost follows Barclays’ strategic revamp earlier this year, aimed at boosting investor confidence by focusing more on domestic lending and streamlining its investment bank.