Despite a soft market reaction, several key metrics moved in Barclays’ (BARC) favour in the first quarter of 2019. Against a strong 2018 comparative, the return on tangible equity came in above target at 9.6 per cent, while a sharp drop in total operating expenses resulted in a swing to pre-tax profit of £1.48bn at the group level.
Capital management was mixed, if broadly steady. While the common tier one capital ratio (CET1) – a measure of capital strength – dipped 20 basis points, group liquidity grew along with tangible net asset value (NAV).
But 2018’s apparent vindication of chief executive Jes Staley’s faith in the corporate and investment bank (CIB) division already looks dated. Despite a healthy 4 per cent rise in revenue from fixed income, currencies and commodities income from the investment bank fell 11 per cent to £2.5bn, as a result of “reduced client activity, lower volatility and a smaller banking fee pool across the industry”.
Against another decent showing from the high street and credit card businesses, the investment bank’s outing appears to strengthen the argument of activist investor Edward Bramson, who is agitating for the bank to sell off the group of supposed rainmakers.
