By Chris Dorrell
Barclays has announced a new £750m buyback programme after beating expectations on the back of a strong performance from its cards business and a healthy tailwind from rising interest rates.
In the three months to June, Barclays’ profit rose 31 per cent to nearly £2bn, slightly higher than the £1.9bn analysts had predicted.
While both Barclays’ UK retail arm and its corporate and investment bank undershot expectations, the consumer, cards and payments division recorded a 18 per cent rise in profit.
The bank said this reflected higher balances in the US as well as growth in client assets.
Despite falling below expectations, Barclays UK, the bank’s ring-fenced retail division, still recorded a 14 per cent rise in profit. This came thanks to higher net interest income, but the bank noted this was offset by “dynamics in deposits and mortgages”.
On the back of the results, Barclays announced a £750m share buyback programme and paid out a dividend of 2.7p per share, up from 2.25p last year.
Chief executive C.S. Venkatakrishnan said: “We have positioned Barclays carefully for this mixed macroeconomic environment and delivered a consistent performance in the second quarter.
“Through our diverse sources of income, prudent risk management, and ongoing cost discipline we have again demonstrated the stability and strength of the franchise we have built over many years,” he continued.
Credit impairment charges, costs set aside to cope with bad loans, hit £372m, which was 86 per cent higher than last year but significantly lower than the £597m predicted by analysts.
Yesterday rival lender Lloyds revealed that profits had remained flat year-on-year suggesting the boon of rising rates might be nearing an end. Natwest will announce results tomorrow with HSBC to follow on Monday.
More to follow
