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BCS Stock Down 2% in Pre-market, Barclays Reports 2021 Q3 Earnings Results

UTC by Steve Muchoki · 3 min read
BCS Stock Down 2% in Pre-market, Barclays Reports 2021 Q3 Earnings Results
Photo: Depositphotos

Barclays reported a profit before tax of £6.9 billion compared to £2.4 billion recorded in the same time last year.

Barclays PLC (NYSE: BCS) stock traded around $11.02, down approximately 1.96% as of October 21, 2021, 7:09 a.m EDT. The British multinational universal bank reported its 2021 third-quarter earnings results that ended on September 30. The Barclays bank beat Wall Street analysts’ expectations as noted with its competitors in their Q3 earnings.

According to the 2021 Q3 report, Barclays reported a profit before tax of £6.9 billion compared to £2.4 billion recorded in the same time last year.  Additionally, the company reported a return on tangible equity (RoTE) of 14.9% compared to last year’s third quarter of 3.6%. Further, the bank recorded earnings per share (EPS) of 30.8p against last year’s Q3 of 7.6p.

Notably, the company attributed its continued growth to its market diversification, particularly during the Covid crisis.

“On top of a good first half, a strong third-quarter performance means Barclays has delivered its highest Q3 YTD pre-tax profit on record in 2021, demonstrating the benefits of our diversified business model. We continue to support our customers and clients through the COVID-19 pandemic, have achieved a double-digit RoTE in every quarter year to date, and expect to deliver a full year RoTE above 10%,” James E Staley, Barclays’ Chief Executive Officer, noted.

During the third quarter, the bank recorded a total income of  £16,780 million compared to £16,825 million reported at the same time last year.

Barclays: Performance in Q3 2021

Forward, the group expects to deliver a RoTE that is above 10% for the year 2021. Further, the company expects the impairment run rate to remain below historical levels in the coming quarters. The company attributed the call on reduced unsecured lending balances and the improved macroeconomic outlook. Additionally, the level of uncertainty presented by the Covid crisis remains a huge factor.

Notably, the bank expects the financial year 2021 costs excluding structural cost actions and performance cost to be £12bln.

“The Group will continue to drive efficiencies in its franchises and is evaluating planned structural cost actions in Q421, including in Barclays UK,” the company noted.

Side Notes

The bank is, however, experiencing a historical push and pull from the booming crypto industry. As noted by the European Bank head officials, the stablecoin industry is set to significantly disrupt the banking sector in the coming years.

Nevertheless, the company is hopeful it will deliver a strong financial year and the coming quarters. “For many years, we were being asked the question of ‘how does Barclays get to its target return on capital of 10% or better?’ and I think 2021 will be a pretty strong answer to that question,” Barclays CEO Jes Staley told CNBC on Thursday.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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