Barclays PLC (BCS) Q3 2022 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

CS Venkatakrishnan

Good morning, everyone, and thank you for joining us today. I am pleased to report another strong quarter extending the robust operating performance that Barclays has delivered so far this year. In the third quarter, profit before taxes was £2 billion, generating a return on tangible equity of 12.5% and an earnings per share of 9.4p. This leaves us in a good position to deliver our full year statutory return on tangible equity target of above 10%.

I would like to highlight, in particular, the strength and consistency of our results as we continue to execute on our business. We see broad-based income momentum across all our 3 operating businesses. Group income growth was 17% in third quarter year-on-year excluding the impact from the over-issuance of securities, a subject to which I'll return to in a moment.

There were several important drivers of this performance that I wish to highlight. First, in the Corporate and Investment Bank, we continue to gain revenue share in our markets business, driving the best Q3 income in both markets and fixed income, FICC, in recent years. Notably, our FICC performance was particularly strong and ahead of our U.S. peers with income up 63% in dollars as we supported our clients in very challenging markets. In Barclays U.K., we positioned ourselves well for rising interest rates with a growing contribution from our structural hedge as we locked in higher yields.

Within the Consumer Cards and Payments business, growth in our U.S. Card balances was delivered by a recovery in spending and the first quarter of our partnership with GAP, which is starting to show results. Taken together, both balanced growth and the management of our sensitivity to higher interest rates contributed to significant growth in the net interest income for the group.

And finally, whilst we are a U.K.-domiciled bank we have a truly global footprint, providing attractive exposure to the U.S. economy with over 40% of our group income generated in U.S. dollars.

While our income story paints a compelling picture, we remain, however, cautious about the macroeconomic outlook globally, and have been approaching it accordingly over the last year. In fact, we have been prudent in our balance sheet management for many years in particular since the days following the EU referendum in the U.K. We have reviewed our corporate loan portfolios, particularly in more vulnerable sectors, reducing exposure and managing our risk by acquiring significant credit protection.