Barclays profits plummet following debt sale mistake and trading slump

A branch of Barclays Bank in London.


Chris J. Ratcliffe/Bloomberg News

LONDON— Barclays BCS -0.41%

PLC said its net profit fell in the first quarter, due to a sale of debt and lower trading levels.

The London-based lender said on Thursday it earned £1.4bn, or $1.8bn, in the three months to the end of March, compared to £1.7bn in the same period the last year. Analysts had expected the bank to post a profit of £1.55 billion for the quarter. Revenue increased by 10% to £6.5 billion.

Barclays’ earnings echo the performance of major US banks, which also reported significant declines in profitability in the first quarter. Morgan Stanley and Citigroupit is

net revenues fell 11% and 46% respectively.

Headwinds include the highest inflation in decades and a war-induced commodity price spike in Ukraine that has catalyzed market turmoil and a drop in trading. The UK faces a particularly acute cost of living crisis, with UK households set to experience the biggest drop in real incomes in 30 years.

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Barclays’ corporate and investment banking profit rose 4% to £1.3bn in the first quarter, with lower investment banking charges but increased activity in the global markets as the bank supported its clients through the volatile period. Profit for the bank’s UK unit rose by a third to £396 million.

Barclays chief executive CS Venkatakrishnan found himself in a sticky spot early in his tenure after the bank said last month it was facing a £450million loss and a regulatory probe . Its US division, in what amounted to a clerical error, accidentally sold more structured notes than allowed by the Securities and Exchange Commission. He said he planned to redeem the tickets at a loss. Mr Venkatakrishnan was previously the bank’s chief risk officer.

Barclays said it had a provision of £540million linked to the case and the bank reported a 14% rise in operating expenses largely due to litigation and conduct charges.

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Write to Anna Hirtenstein at [email protected]

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