Barclays cashes in on rate rises and deposits
Barclays is cashing in on rate hikes and deposits as customers switch accounts during the global banking crisis
Barclays benefited from a £10bn inflow of deposits as worried customers switched accounts amid a global banking crisis.
The group was also boosted by rising interest rates as first-quarter profits rose 16 percent to £2.6 billion, its highest level in 12 years.
Shares rose 5.3 percent, or 8.18p, to 162.04p, as the results suggested Barclays has emerged relatively unscathed from the turmoil that shook the industry last month.
Riding the storm: Barclays was boosted by rising interest rates as first-quarter profits rose 16% to £2.6bn, its highest level in 12 years
Chief executive CS Venkatakrishnan – known as Venkat – said robust risk management “helped protect Barclays from recent events”.
It was the first major British bank to report on a tumultuous period in which banking stocks around the world came under severe pressure.
Credit Suisse saw a £55bn customer exodus in the quarter, while troubled US lender First Republic experienced a £58bn drop in deposits, with the revelation fueling another sell-off.
Venkat said: “We have seen volatility in elements of the banking sector. They were very specific to the institutions involved, but it casts a bit of a shadow.
“That’s calmed down a lot, but it’s not completely gone, as we’ve seen in the US over the past few days.”
The bank grew deposits by £10bn to £556bn, mainly from corporate clients.
In the UK, personal banking revenue rose 23 percent to £1.3 billion, driven by higher interest rates.
Venkat said the outlook for the UK and US was ‘slightly better’ than six months ago, adding: ‘That doesn’t mean we’re out of the woods.
“It’s better than we thought it would be, but still not back to what we would consider a soft landing.” That requires us to be a little more careful.”
Meanwhile, Deutsche Bank’s profit rose 9 percent to £1 billion but said it will cut 800 jobs.