Barclays trading revenue comes in 60% higher in H1

Written by: Wajeeh Khan
July 29, 2020
  • Barclays trading revenue comes in 60% higher in the first half of the current fiscal year.
  • The investment bank reports £695 million of net income and £1.3 billion of pre-tax profit.
  • The financial service firm set aside £1.6 billion to cover for COVID-19 drive credit losses in Q2.

In a report on Wednesday, Barclays (LON: BARC) said that its net income in the first half (H1) of the ongoing financial year came in at £695 million. In the second quarter, the company said, it set aside £1.6 billion to cover for COVID-19 drive credit losses. It concluded H1 with £3.7 billion of credit impairment charges in total. Its peer, Deutsche Bank, also reported earnings on Wednesday.

Shares of the company dropped about 7% on market open. At 105 pence per share, Barclays is more than 40% down year to date in the stock market after recovering from an even lower 80 pence per share in the first week of April. Barclays had warned in April that the pandemic will results in a massive hit to its profit.

Barclays’ prints its CET1 ratio at 14.2% in H1

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In terms of revenue, Barclays reported £11.6 billion in the first two quarters combined that was branded stronger than £10.7 billion in the same period last year. At the end of H1, the British multinational investment bank printed its CET 1 (Common Equity Tier 1) ratio at 14.2% versus the year-ago figure of 13.1%.

Barclays’ board decided to announce its decision regarding the company’s capital returns policy and future dividends at the conclusion of the current fiscal year. Despite the Coronavirus pandemic that has so far infected a little under 300,000 people in the United Kingdom and caused over 46,000 deaths, the financial services company expressed confidence that mortgage applications were still encouraging in recent months.

In the past two weeks, mortgage applications were higher in number as compared to the comparable period of 2019. The company, however, warned on Wednesday that its profit in fiscal 2021 is likely to take a hit due to COVID-19 uncertainty and lower interest rates. Learn more about profit and loss statements.

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Barclays registers £1.3 billion of profit in H1

In the first half, Barclays posted £1.3 billion of pre-tax profit that came in lower than £3 billion in the same period last year. Thanks to the virus-driven market volatility, Barclays saw a 60% increase in trading revenue in H1. Its markets division alone generated £2.1 billion of revenue that represents a 49% growth on an annualised basis.

Barclays performed fairly upbeat in the stock market last year with an annual gain of roughly 25%. At the time of writing, the London-based investment bank and financial services company is valued at £18.19 billion and has a price to earnings ratio of 9.06.