Pre tax profits for the group rose for the third quarter, excluding notable items rose to £1.7bn. This was above analysts forecasts of £1.3bn and significantly up on the £1.4bn reported for the same quarter last year.
The increase in performance came largely from improved performance in its investment banking arm where profits were up over 40 per cent. Income from the division was 1.4 billion pounds against 1.1 billion for the same period last year.
The strong performance echoed similar bumper earnings from its US investment rivals Morgan Stanley, Goldman Sachs and Bank of America. Following the UK Brexit markets have seen a renewed interest in bond trading. This has resulted in a surge in performance of the fixed income divisions of investment banks.
The compnay has focused on the disposal of non-core assets and addressing historical issues Chief executive Jes Staley . He went on to say “The growing momentum in attaining our strategic goals means we can feel optimistic of our prospects of completing the restructuring of Barclays.”
The company also announced further provisions to meet claims for the mis-selling of PPI (Payment Protection Insurance). A further £600m was provisioned for claims, exceeding analysts’ top end predictions of £500m for the quarter. The latest provision brings the total amount set aside over the last two quarters to £1 billion.
A final deadline for PPI claims has been set for June 2019 by the Financial Conduct Authority (FCA). As a result analysts anticipate that this could be the final provision that has to be set aside by the bank. The PPI claims rank among one of the biggest financial scandals in history.
Barclays shares were up 2% just after the open at £1.86.
Outlook
Shares in Barclays has a good run and are now approaching resistance at £183.00. Traders wanting to trade the stock should note the higher resistance level at £1.88. This will need to be overcome to see additional top side momentum.
And end to the PPI scandal in sight and the potential for further earnings to be maintained into the final quarter offer the potential for further gains over the longer term.