Barclays reported strong Q1 results in FY26 with income bolstered by trading volatility linked to the Iran war despite a hit to the bank’s loan portfolio.
Total income rose by 6% to £8.2B while profit before tax increased to £2.8B. This marks a increase on £2.7B in Q1 of FY25.
Equity Trading Strong
The investment bank’s performance surpassed expectations, exceeding £4B for the first time in a quarter citing strong trading and advisory activity.
Barclays benefited from a 16% YoY growth in equities trading, equivalent to a 23% increase in U.S. dollar terms, along with a 17% rise in investment banking fees.
Investor Uncertainty Weighs on Lending
Despite income and profit rises, Barclays’ loan portfolio saw investor uncertainty weigh on stock value. Stocks fell by 2% earlier this week.
The bank’s return on tangible equity (RoTE) declined to 13.5% from 14.0% in the previous year, driven in part by rising loan losses.
Barclays also recorded a £228M charge associated with the collapse of UK mortgage lender Market Financial Solutions (MFS). The chief executive indicated plans to scale back complex lending and reduce exposure to highly leveraged companies following the hit from MFS.
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