Barclays beats profit forecasts as chief executive Jes Staley aims to stay on
The British bank and financial services company reported profit before tax of $1.4bn for the three months to the end of September
Barclays on Friday reported stronger than expected third-quarter results thanks to a return to profit for the bank's consumer businesses and chief executive Jes Staley said he aimed to stay on for two more years.
Barclays is the first major British bank to publish the third-quarter earnings and analysts and investors are watching results for any signs of an expected wave of bad loans due to the fallout from the Covid-19 pandemic.
Barclays reported profit before tax of £1.1 billion ($1.4bn) for the three months to the end of September, almost double the £507 million pounds analysts had forecast.
“While these results are not exactly pretty, they are far less ugly than we had feared they might be," Nicholas Hyett, equity analyst at Hargreaves Lansdown, said.
The bank booked £608m pounds in provisions for bad loans and other charges, down 63 per cent from the previous quarter and well below the £1bn analysts had expected.
However, Barclays said it was considering further cost-cutting measures, which could result in more charges.
Mr Staley said these could include reductions in office space and other such overheads as the bank learns lessons from employees' ability to work from home or at branches during the coronavirus pandemic.
The bank's consumer, cards and payments business made a profit of £165m in the quarter after a loss in the second quarter as US credit card spending recovered.
The stronger-than-expected results boosted the bank's core capital ratio, a key measure of its financial strength, to 14.6 per cent, which was also above forecasts for 14 per cent.
There has been speculation over Mr Staley's future since Barclays disclosed in February that British regulators had launched an investigation into his past connections to the late financier and convicted sex offender Jeffrey Epstein, which is yet to conclude.
British media reports around the same time said the bank's board had appointed a headhunter to search for a successor and that Mr Staley himself had indicated internally that he would leave by 2021.
Mr Staley, who was appointed chief executive in 2015, has said he regrets having had any relationship with Mr Epstein.
"I think we will be here for another couple of years," Mr Staley told reporters on a conference call on Friday.
Like its rivals, Barclays has halted dividend payments at the request of Britain's regulators. It said it would give an update on its payout policy when it reports full-year results.
Barclays downgraded its baseline economic forecast for the UK this year as local lockdowns kick in to control a second wave of the Covid-19 heading into the winter months.
Updated: October 23, 2020 05:22 PM