Barclays Q1 Profit Rises, Adj. Profit Down As Fixed Income Declines

(RTTNews) - British lender Barclays Plc (BCS, BARC.L) Tuesday reported a higher profit for the first quarter, while adjusted pre-tax profit declined due to a fall in Investment Bank income, particularly in fixed income, currencies and commodities, or FICC business.

Looking ahead, the company said, "We continue to be cautious about the trading environment in which we operate and as a consequence we remain focused on structurally reducing the cost base in order to improve returns."

In an interim management statement, Barclays noted that a continued strong momentum across its retail, cards and corporate banking franchises generated higher returns, but was offset by a significant decline in FICC income within the Investment Bank.

Investment Bank income fell 28 percent, mainly driven by 41 percent fall in FICC income due to lower client volumes, changes in business mix in light of ongoing strategic review of the Investment Bank, and a relatively strong first quarter comparison in 2013.

For the first quarter, the company posted pre-tax profit of 1.81 billion pounds, up from 1.54 billion pounds in the previous year. The firm said its recent-quarter result included an own credit gain of 119 million pounds, compared to a loss of 251 million pounds last year.

However, on an adjusted basis, pre-tax profit dropped 5 percent year-on-year to 1.69 billion pounds.

According to the company, the decrease in adjusted pre-tax profit was due to a reduction in Investment Bank income, particularly FICC, and currency movements, partially offset by a reduction in operating expenses of 16 percent to 4.44 billion pounds.

Attributable profit climbed 15 percent to 965 million pounds from 839 million pounds. Adjusted profit declined 13 percent to 882 million pounds from 1.01 billion pounds last year.

Antony Jenkins, Group chief executive stated, "UK Retail, Barclaycard and Corporate together drove approximately half of the Group's income this quarter and we remain well positioned to benefit from further improvements in the economic environment."

Net operating income was 6.22 billion pounds, lower than 6.78 billion pounds last year.

Customer net interest income for RBB, Barclaycard, Corporate Banking and Wealth and Investment Management increased 4 percent to 2.61 billion pounds, reflecting business growth and stable margins.

Tier 1 capital ratio was 43.7 percent as on March 31, 2014, in comparison with 42.7 percent at the end of December 2013.

In addition, the company said a first interim dividend for 2014 of 1.0 pence per share will be paid on June 23, 2014.

BARC.L is currently trading at 246.73 pence, down 11.77 pence or 4.55 percent, on a volume of 19.21 million shares.