FX.co ★ Barclays Q1 Profit, Group Income Down; Sees FY26 Income Of GBP 30 Bln; To Sell Italian Mortgage Book

Barclays Plc, a leading British bank, announced a 12 percent decrease in its pre-tax profit for the first quarter, dropping from £2.60 billion the previous year to £2.28 billion. The basic earnings per share also saw a decrease, from 11.3 pence last year to 10.3 pence.

The overall group income experienced a 4 percent drop from last year's £7.24 billion, standing at £6.95 billion. Despite an increase in structural hedge income, a significant performance in Equities, and balance growth in the US Consumer Bank, these gains were overshadowed by lower Fixed Income, Commodities, and Currency (FICC) income in Investment Banking. Other factors contributing to this decline include lower income linked to inflation and negative product dynamics in Barclays UK's deposit and mortgage sections.

Looking forward to 2024, the bank aims for a return on tangible equity (RoTE) greater than 10 percent, or around 10.5 percent when excluding non-core activities. The projected net interest income, discounting the Investment Bank and Head Office, is estimated at approximately £10.7 billion. Of this number, Barclays UK's contribution is expected to be around £6.1 billion.

By 2026, the bank plans to reach a total group income of roughly £30 billion, with a RoTE above 12 percent. Moreover, Barclays aims to return a minimum of £10 billion to its shareholders between 2024 and 2026 through dividends and share buybacks, favoring the latter option.

Barclays also announced the sale of its performing mortgage book in Italy and plans to invest in high-return UK consumer businesses such as Tesco Bank, which it expects to acquire by the fourth quarter. Meanwhile, the retail mortgage book in Italy currently held by Barclays Bank Ireland PLC is slated for disposal, predicted to result in a pre-tax loss of about £225 million for the year ending 31 December 2024.