British bank Barclays has quadrupled its net profit and group share in the first nine months of the year. The institution had an “unprecedented” third quarter, thanks to a strengthening economy.
The bank also sees “positive trends in the U.K. and U.S. in consumer spending and payment volumes after the lifting” of health restrictions and the reopening of the economy.
The group’s net profit climbed to 5.3 billion pounds for the first nine months of the year.
Although revenues were flat year-over-year at 16.8 billion pounds, there was a decline in interest rate income as well as an increase in commissions, particularly in investment banking.
The group’s share of net profit for the third quarter amounted to 1.4 billion, more than doubling from last year.
CEO James Staley stated that “after a good first half, a solid third quarter allowed Barclays to generate its highest pre-tax profit ever”.
According to the statement, he applauded “signs of a recovery in consumer spending and higher interest rates.”
Q3 result was also driven by provision reversals of 622 million pounds ($860 million). “Due to an improving macroeconomic outlook” and “decreased payment default risks”.
In the UK, the housing market has been boosted by the suspension of the property transaction tax. This was one of the government’s measures to support the economy during the pandemic. Consequently, the group continued to benefit from “strong deposit and mortgage lending volumes”.
Barclays also observes “positive trends in U.K. and U.S. consumer spending and payment volumes following the lifting of health restrictions”.
A positive forecast.
“Despite economic challenges, Barclays should continue its impressive momentum in the fourth quarter,” says Interactive Investor equity strategist Richard Hunter.
Michael Hewson of CMC Markets also notes that Barclays’ earnings trend “is similar to that of U.S. banks”.
The share price, however, was down 0.89% to 196.68 pence at the opening of the London Stock Exchange. This is mainly due to profit taking, while the price was trading at its highest levels in three years, according to Michael Hewson.