BARC Barclays Plc

By Elena Vardon

Barclays lowered its U.K. net interest margin guidance for 2023 and posted lower-than-expected third-quarter income growth, with income at its corporate and investment bank missing expectations.

The British bank on Tuesday said its now expects a net interest margin for Barclays UK of between 3.05% and 3.10% for the year. It had lowered its 2023 margin guidance to no more than 3.20% at its half-year results in July with a view of around 3.15%.

The lender said its U.K. net interest margin for the three months ended Sept. 30 was 3.04%, following a 3.22% margin for the second quarter, after continuing product dynamics with lower deposits volumes and mortgage margin pressure partly offset net interest income growth from higher rates.

"The challenging environment has persisted with customer behavior driving a reduction in the [net interest margin] outlook and balances," Barclays said of its U.K. performance.

For the whole group, total income was 6.26 billion pounds ($7.66 billion) for quarter compared with GBP5.95 billion a year earlier and a GBP6.29 billion estimate taken from a company-compiled consensus. Income at its international division's corporate and investment bank was GBP3.08 billion against expectations of GBP3.13 billion, dragged by lower client activity and a reduced banking industry fee pool, which wiped out corporate income gains from higher rates, it said.

Pretax profit came in at GBP1.885 billion compared with GBP1.97 billion a year earlier and against expectations of GBP1.77 billion. The bank booked a GBP477 million credit impairment charge, less than the expected GBP570 million for the period. Barclays said it is evaluating cost-cutting actions that could result in material additional charges in the fourth quarter.

"We see further opportunities to enhance returns for shareholders through cost efficiencies and disciplined capital allocation across the group," Chief Executive C. S. Venkatakrishnan said, adding that the company will provide revised financial targets at its full-year results.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

October 24, 2023 03:10 ET (07:10 GMT)

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