On Thursday 24th October 2024, Barclays Bank announced a net profit of £1.6 billion ($2 billion) for the third quarter, surpassing expectations
This figure exceeded the anticipated £1.17 billion net profit from analysts and marked a 23% increase from the same quarter in 2023.
The revenue for the quarter was reported at £6.5 billion, just over the predicted £6.39 billion.
Shares of Barclays rose by 3.5% as of 08:45 BST – hitting their highest point since October 2015 according to reports.
Barclays Bank One year share chart
The bank’s return on tangible equity improved to 12.3% from the previous quarter’s 9.9%, while its CET1 ratio, a key solvency metric, increased to 13.8% from 13.6%.
Barclays had earlier this year unveiled a strategic revamp aimed at reducing expenses (cost cutting), enhancing returns for shareholders, and securing long-term financial stability.
This shift has emphasized domestic lending and scaled back the investment banking division’s costs. Part of this new strategy involved acquiring the retail banking operations of Tesco Bank in the UK.
Common Equity Tier 1 (CET1)?
Common Equity Tier 1 (CET1) is a key element of Tier 1 capital, consisting mainly of common stock held by banks or other financial institutions. Introduced in 2014, CET1 serves as a capital measure designed to safeguard the economy from financial crises. Banks must adhere to the minimum CET1 ratio requirements relative to their risk-weighted assets (RWAs), as specified by their financial regulators.
History lesson
Barclays Bank was formally established on November 17, 1690. It traces back to goldsmith bankers John Freame and Thomas Gould in London.
The name ‘Barclays’ came into the business in 1736 when James Barclay, who married John Freame’s daughter, joined the partnership.