Barclays’ Share Price (LON: BARC) Hits New High as Q3 Profits Surge

Barclays shares (LON: BARC) hit a new 52 week high of 251.30, with a gain of 4.14% on the day bringing YTD appreciation to 59.71% for the bank. One of the UK's leading names in the financial services industry and a constituent of the FTSE 100, Barclays reported an impressive pre-tax profit of £2.2 billion for the third quarter. This marks an 18% increase from the £1.9 billion announced in the corresponding period last year and significantly exceeded the expectations of industry analysts.

A significant driver of Barclays' financial success this quarter has been its investment banking division, which saw a robust increase in income. The investment banking arm achieved a six percent growth, with total revenues reaching £2.9 billion. Standout performance in investment banking contributed to a 13% uptick in this sector's income.

The UK retail banking division of Barclays has also demonstrated a strong performance, showcasing resilience amidst economic uncertainties. With a four percent rise in total income, the division has managed to maintain a robust balance sheet. Moreover, recognizing potential risks prudently, the bank set aside a modest £16 million for bad loans during the quarter, reflecting confidence in the quality of its credit portfolio.

Looking forward, Barclays has updated its 2024 financial outlook. The bank forecasts that the group's net interest income will surpass £11 billion, of which the UK division is expected to contribute approximately £6.5 billion.

As part of its strategic adjustments, Barclays is downsizing its investment bank. This move is aimed at concentrating resources into more profitable sectors within the group. In line with this strategy, the bank is escalating investments in its UK operations, corporate banking, and wealth and asset management services.

CEO C.S. Venkatakrishnan has outlined a three-year transformation plan aimed at reducing costs by £2 billion. The plan includes the ambitious target of returning £10 billion to shareholders by 2026.

The third-quarter results also reflected stability in operating expenses, which were maintained at £4 billion. With these steady expenditures, Barclays is on course to achieve a return on tangible equity (RoTE) of over 12% by the year 2026.

Barclays' share price has shown impressive growth, rising by 84.19% over the past 12 months and marking out the stock as one of the top performers in the FTSE 100.

Barclays' third-quarter results paint a picture of a robust financial institution capitalising on its investment banking strength and demonstrating resilience in its retail banking sector. The bank's strategic direction, focused on enhancing profitability and returning value to shareholders, coupled with stringent cost control measures and an upbeat financial forecast, reinforces investor optimism about its future performance.