LONDON (Reuters) -Barclays said on Wednesday its first-quarter profit rose a better-than-expected 19%, as frenzied trading activity in the first three months of the year boosted investment banking revenue.
The British bank reported profit before tax for January-March of 2.7 billion pounds ($3.62 billion), up from 2.3 billion pounds a year ago and above analysts’ forecasts for 2.5 billion pounds, according to LSEG data.
Income at the lender’s investment bank rose 16% from a year ago to 3.9 billion pounds in the first quarter, above analysts’ forecasts for 3.5 billion pounds.
Barclays reiterated its performance goals for the year, and even lifted its guidance for 2025 income to above 12.5 billion pounds from a previous forecast of 12.2 billion, spurred by expected growth at its domestic lending division where it has been competing strongly for mortgage and consumer lending business.
The lender in February had already raised its 2025 performance targets after reporting better than expected annual profit for 2024, but will now have to deliver on those targets in a more volatile environment clouded by a trade war between the U.S. and other economies, including China.
Barclays did however update its economic forecasts to reflect the uncertain outlook for global economic growth since U.S. President Donald Trump unleashed plans for sweeping tariffs on April 2.
That triggered the bank to set aside an additional 91 million pound charge against potential future losses, mainly in its U.S. consumer bank and investment bank.
WALL STREET SAYS WORSE TO COME
The strong performance from Barclays’ investment bank overall matched U.S. rivals that earlier this month reported bumper profits, as traders capitalised on buoyant markets in the early days of Trump’s presidency.
Barclays said income from its traditionally strong fixed income trading rose 21%, better than an average of 6% among the top five Wall Street banks, according to a Reuters calculation from company statements.
The British bank however undershot the bumper quarter for stocks trading among those same U.S. peers, where equities revenues rose an average 32% in the first three months of the year compared to the same period a year ago.
Barclays said investment banking fees from advising on mergers and corporate fundraising rose 4% in the first quarter, in line with the increase among the top five U.S. players, Bank of America , Citi, Goldman Sachs, JPMorgan and Morgan Stanley.
Despite the strong first quarter, Wall Street bank bosses warned that the outlook for the rest of the year is murkier, as trade tensions sparked by U.S. tariffs threatened rising inflation and possibly a recession.
Barclays last year laid out a three-year plan to cut costs, return more cash to shareholders and invest in its higher-returning domestic business.
($1 = 0.7469 pounds)
(Reporting by Lawrence White; Editing by Sinead Cruise and Jan Harvey)
By Lawrence White and Sinead Cruise
