Barclays lifts annual NII target as Q3 profits rise

Barclays has nudged up its net interest income guidance for the full year after a solid third quarter, with the bank on track to deliver on its short and medium-term financial metrics.

The bank said it expects 2024 net interest income (NII) excluding investment bank and head office activities to be “greater than £11bn”, compared with earlier expectations of “c£11bn”. Within this, NIII guidance from the Barclays UK division has been lifted from £6.3bn to £6.5bn.

Barclays reported a profit before tax of £2.2bn in the third quarter, up from £1.9bn a year earlier, helped by a 5% increase in group income to £6.5bn.

Barclays UK income was up 4% as higher structural hedge income was partially offset by mortgage margin pressure and adverse product dynamics in deposits, which have stabilised throughout 2024.

UK corporate banking income was 1% higher, while investment banking income rose 6%, but income from the private bank and wealth management division fell 3% due to a strong comparative with last year.

At the same time, operating expenses held steady year-on-year at £4.0bn as cost efficiency measures more than offset inflation.

The common equity tier 1 ratio was 13.8% by the end of the September, in line with full-year guidance of 13-14%.

Statutory return on tangible equity was 12.3% in the third quarter, up from 11% a year earlier. That lifted year-to-date RoTE to 11.5%, meaning the bank is on course to comfortable beat its 2024 target RoTE of greater than 10%.

"We continue to be focused on disciplined execution of our three year plan and are encouraged with progress to date. Whilst there is more work to do, the Group is on track to achieve its target of greater than 12% RoTE in 2026," said chief executive CS Venkatakrishnan.