Stock trading business receives \”windfall\”, Barclays Bank (BCS.US) Q1 revenue exceeds expectations

Barclays Bank\’s revenue in the first quarter was 7 billion pounds, a year-on-year decrease of 4%, exceeding market expectations; the group\’s net interest income was 3.072 billion pounds, compared with 3.053 billion pounds in the same period last year, of which Barclays UK NII was 1.5 billion pounds.

Barclays PLC (BCS) reported first-quarter revenue that beat analysts\’ expectations after the bank\’s stock trading business received an unexpected extra gain from turbulent global markets.
Barclays Bank\’s revenue in the first quarter was 7 billion pounds, a year-on-year decrease of 4%, exceeding market expectations; the group\’s net interest income was 3.072 billion pounds, compared with 3.053 billion pounds in the same period last year, of which Barclays UK NII was 1.5 billion pounds.
Pre-tax profit was 2.3 billion pounds, a year-on-year decrease of 12%; attributable profit was 15. billion pounds, a year-on-year decrease of 13%, lower than analysts’ expectations of 1.47 billion pounds.
Earnings per share were 10.3 pence, compared with 11.3 pence a year earlier.
The loan loss rate was 51 basis points, within the expected range of 50-60 basis points.
Revenue related to the bank\’s global markets business fell to 2.3 billion pounds ($2.87 billion) in the first quarter, exceeding analysts\’ average forecast of 2.19 billion pounds.
The unit\’s results benefited from a 25% surge in equity trading revenue, which more than offset lower-than-expected results from its fixed-income markets unit.
Barclays CEO C.S. \”On the equities side, we are doing very well,\” Venkatakrishnan said. \”Securitized products are doing very well and on the rates side in Europe, we are a little bit weak.
\”The sluggish quarterly results of FICC\’s business are in sharp contrast to Deutsche Bank\’s trading business.
Deutsche Bank\’s trading business grew 7% in the first quarter, beating analysts\’ expectations and better than most of the largest U.S. investment banks.
Venkatakrishnan revamped Barclays\’ business structure earlier this year and set more ambitious financial targets in a wide-ranging investor presentation.
Venkatakrishnan and chairman Nigel Higgins are facing increasing pressure from investors as Barclays\’s returns are mediocre and its share price sluggish.
Barclays reported a return on tangible equity of 12.3%.
The company still expects the metric to exceed 10% this year.
The company has sold a portfolio of sound Italian retail mortgages and is in discussions to sell a Swiss franc-linked portfolio of distressed Italian retail mortgages.

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