Barclays enjoyed a record quarter at the start of 2021, hitting pre-tax profits not seen in 13 years, the bank has revealed.
Bosses said the £2.4 billion pre-tax profit for the first three months of the year came through strong growth in its corporate and investment banking division and an improved mortgage book.
The bank’s high street division had a mixed period as the recent lockdowns reduced consumer spending, but the stamp duty holiday continued to help the housing market and its mortgage division.
Impairment charges – money put aside in case of defaulting loans – were also significantly reduced as the economy improved and the post-pandemic outlook appeared more stable compared with a year ago.
The charges for the quarter were just £55 million compared with £2.1 billion a year ago, although, unlike rivals NatWest and Lloyds, Barclays said it will not release the provisions just yet.
Chief executive Jes Staley said: “Since the early days of the pandemic last year, our diversified business has demonstrated the resilience critical to ensuring Barclays’ financial integrity.”
He added that the bank had high hopes for the economy to bounce back, with predictions of a recovery not seen for more than 70 years.
The boss said: “Our economic forecast for the UK economy is to grow year on year by some 6.5%, which would be the strongest growth rate in the British economy since 1948.
“There’s tremendous pent-up demand both with the consumer and small businesses, and we see that as the vaccination programme, which has been an extraordinary success in the UK, continues.
“The spend data we’re already starting to see is very encouraging. In the first two weeks of April our spend numbers was 70% over the first two weeks of April last year.
“We’re starting to see a quite robust economic recovery in 2021 and we think that will carry through into 2022.”
He pointed out that the corporate and investment bank (CIB) had a particularly strong quarter, with income of £3.6 billion, and return on tangible equity (RoTE) – the bank’s preferred measure – was 17.9%.
Mr Staley added that the CIB growth “partially offset challenges in our consumer businesses that have been impacted by lower spend and activity levels as a result of the pandemic”.
Barclays UK saw income of £1.6 billion – down 8% – as savings and spending during the lockdown slowed, although its mortgages grew by £3.6 billion to £151.9 billion.
Mr Staley added: “As we enter the next phase of this pandemic, we remain resolute in our commitment to support the economic recovery.
“From our spend data, which captures UK economic activity across our cards and acquiring businesses, we are already seeing encouraging early signs of recovery in some sectors, including those hit hardest by the crisis.”
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