Barclays has revealed its earnings jumped by nearly a fifth in recent months, as the investment banking unit cashed in on an increase in dealmaking amid continued cost-cutting.
The bank reported a pre-tax profit of £2.2 billion between July and September, nearly a fifth more than the £1.9 billion made this time last year.
This beats forecasts, with analysts previously pencilling in a third-quarter profit of about £2 billion.
Barclays said it generated more income than last year, with a 13% increase within its investment banking division amid more dealmaking among global firms and boosted equity trading.
CS Venkatakrishnan, Barclays’ group chief executive who is known within the bank as Venkat, said there have been “some very large transactions of which we have been an important part”.
He said Barclays had advised on deals such as Indian telecoms giant Bharti Global taking a 25% stake in BT, and Verizon acquiring rival Frontier Communications for 20 billion US dollars in the US.
As a bank, we are very pleased with the focus on growth, we are very happy to be involved in these discussions, we are very ambitious about the way in which we can help
Inflation coming under control, low unemployment and economic growth has helped trigger more deal activity in the UK and the US, with the volume of mergers and acquisition up about a fifth compared with last year, Venkat said.
Meanwhile, Barclays said that its customers were continuing to “fare extremely well” in recent months, amid still elevated interest rates and a higher cost of living.
Finance chief Anna Cross said customers were “still seeking higher [savings] rates but at a much lower rate than in previous quarters”, adding that this change in consumer behaviour had “stabilised the balance sheet”.
Looking ahead, Venkat said Barclays would welcome the focus on economic growth at the upcoming autumn Budget.
“I see from the Labour Government… a very clear vision about what they want for the UK,” he said.
“That vision is one of economic growth, and growth that is broad-reaching and covers the important sectors of the economy.
“All of that requires some amount of investment, and that has got to be funded both by taxes and borrowing, and private sector help.
“As a bank, we are very pleased with the focus on growth, we are very happy to be involved in these discussions, we are very ambitious about the way in which we can help.”
It echoed remarks made by the chief financial officer of Lloyds on Wednesday, who said the banking group would welcome a Budget that aligns with the Government’s “pro-growth agenda”.
Elsewhere, Barclays has continued its cost-cutting drive with £300 million of savings made over the latest period, with it targeting about £1 billion worth of savings over 2024.
It said it was expecting to bring in more income for the year than it previously thought, with the bank in the middle of a major strategy plan that is set to see more money returned to shareholders.
Meanwhile, the lender’s acquisition of Tesco Bank, announced at the beginning of the year, is expected to have completed by November, it said.
