Barclays beat forecasts with £2bn profit

Its profits jumped 6% from last year’s £1.9bn and beat consensus of £1.8bn for the period.

The group made a £381m provision for loan impairment charges, more than triple the £120m it reported a year ago.

This was due to a worsening economic outlook, with the bank acknowledging that UK customers are more vulnerable to high inflation and rising interest rates.

But Barclays reassured investors that “arrears remain below historic levels”, meaning they are not reporting a marked increase in the number of people falling behind on their loans despite the worsening cost of living crisis.

It also showed that expected credit losses – which refers to the amount banks must set aside in reserves against losses – were only marginally higher.

Its total ECL for home loans is £347m, up just 2.4%, rising to £432m on a worst-case scenario.

In addition, Barclays said UK personal banking profits rose 14% to £3.3bn as interest rates rose, making it more expensive for people to borrow.

Barclays also said the ongoing fallout from a US filing error cut its profits by £37m in the latest quarter.

In July, the estimated impact of the disaster was revealed to be £1.5 billion.

Barclay’s Group Executive Director Venkatakrishnan emphasized that the bank’s profit increased sharply compared to last year.

He said: “We delivered another highly profitable quarter and achieved revenue growth in each of our three businesses, increasing group revenue by 17% to £6.4 billion.

“We are ready to support customers and clients facing an uncertain economic environment and high cost pressures.

“Whether helping retail clients manage their finances or corporate clients navigate volatile markets, we will continue to focus on meeting their needs.”