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Barclays Posts Q1 2022 Results, Beats Expectations but Falls Short YoY

UTC by Tolu Ajiboye · 3 min read
Barclays Posts Q1 2022 Results, Beats Expectations but Falls Short YoY
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According to Barclays, its Q1 2022 earnings report was impacted by a number of factors, including inflation and operational bottlenecks.

Barclays Plc (LON: BARC) recently posted its Q1 2022 financial report, showing a better-than-expected performance in profit. The London-based multinational universal bank benefitted immensely from strong income growth on the back of solid investment performance. However, Barclays pre-tax profit of £2.2 for the quarter ended March 31st still represents a 7% decline from the £2.4 billion it gathered for the same period last year. 

The Chief executive of the leading bank CS Venkatakrishnan suggested reasons for this decline. In a statement, the American banker who assumed the role in November 2021, said:

“We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs.”

Barclays’ Q1 2022 net profit attributable to shareholders stood at £1.4 billion, or $1.76 billion, beating the consensus estimate of £644 million. However, this latest figure is 18% less than the £1.7 billion the British banking giant realized during the same period last year. Barclays also reported a group income of £6.5 billion, which represents a 10% YoY increase owing to strong earnings. In particular, the bank singled out sizable corporate and investment banking earnings during a spike in market volatility.

Barclays Q1 2022 Results Also Impacted by US Trading Flub

Barclays also ascribed its Q1 2022 net profit decline to lower levels of dealmaking. In addition, the British banking giant also pointed to a costly blunder from a US debt sale. As a result of this trading error, Barclays stated that it would be suspending its planned share buyback program.

According to Barclays, it sold $15.2 billion more than allowed in US investment products or structured notes. As a result, the prominent bank has set aside a provision of £540 million. Furthermore, Barclays originally stated that it expected a £450 million hit from this issue. In addition, the leading bank also reported a 14% rise in operating expenses in large part to the litigation and conduct charges. US regulators are currently investigating the alleged Barclays trading flub.

In its latest earnings report, Barclays touched on the trading blunder development in a statement that read:

“Barclays believes that it is prudent to delay the commencement of the buyback programme until those discussions [with the SEC] have been concluded. [The bank] remains committed to the share buyback programme and the intention would be to launch it as soon as practicable following resolution of filing requirements being reached with the SEC and the appropriate 20-F filings having been made.”

British Economic Outlook

Countless Britons are facing substantial increases in energy bills, council tax, and a national insurance tax rise. In addition to these, there is also the problem of inflation. Currently, inflation is at 7%, higher than seen in the past 30 years. At 7%, it exceeds the 4% average annual pay rise offered in April by employers.

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