Barclays beats expectations but suspends buybacks after U.S. trading blunder

On Thursday, the company said it had suspended its planned share buy back program due to a trading error in the U.S.

It reported a better than expected profit for the first quarter, as strong investment banking performance helped drive income growth.

The British bank said last month that it had sold more U.S. investment products than it was allowed to. The issue that led to the postponement of the share buyback program is currently being investigated by U.S. regulators. The bank had said it expected a hit of 450 million.

The bank said in its earnings release that it is prudent to delay the start of the programme until the discussions with the SEC have been concluded.

The intention is to launch the programme as soon as possible after the filing requirements are reached with the SEC and the appropriate 20-F filings have been made.

The first-quarter net profit attributable to shareholders was above analyst expectations. The net profit came in at 1.7 billion in the first quarter of 2021.

Strong corporate and investment banking earnings during a spike in market volatility resulted in a 10% increase in group income.

Global Markets has been helping clients navigate ongoing market volatility caused by the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK.

There were other highlights for the quarter.

• Total operating expenses increased to £4.11 billion, up from £3.58 billion in the first quarter of 2021, due to the rise in litigation and conduct charges resulting from the U.S. trading error.
• CET1 ratio, a measure of bank solvency, came in at 13.8%, down from 15.1% in the final quarter of 2021.
• Return on tangible equity hi 11.5%, down from 14.7% in the same quarter of last year, and the bank said it will continue to target RoTE of more than 10%.

The results came after a turbulent end to the year, with long-time CEO Jes Staley resigning in November after an investigation into his relationship with Jeffrey Epstein. He was replaced by another person.

Concerns over interest rates, inflation, and a slowdown in growth have caused shares to fall 22% so far this year.

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