Barclays Profit Rises on Investment Banking

Shares fell 1% in early trading. The bank’s shares have risen 34% this year, outpacing the 12% rise in the U.K.’s benchmark FTSE 100 index.

Barclays Chief Executive Jes Staley has reinvigorated the lender’s trans-Atlantic investment banking unit and fended off activist investor Edward Bramson, who wanted Mr. Staley to scale it back and focus on U.K. retail banking. Mr. Bramson’s Sherborne Investors sold its 6% stake in Barclays earlier this year.

Profit at Barclays’s corporate and investment bank rose 85% to £1.16 billion during the third quarter. Profit at the bank’s U.K. unit almost tripled, reaching £317 million.

Disruption in Britain from global supply-chain bottlenecks, including a shortage of truck drivers and gasoline, is in part a result of a surge in demand as the country has lifted many of its lockdown restrictions in recent months, Mr. Staley said.

He said he expects the U.K. economy to grow 7% this year, after a nearly 10% drop in 2020.

“You’ll see restocking of supplies, putting more goods on shelves, hopefully getting more gas trucks driving around the country,” Mr. Staley told journalists Thursday. “The supply chain issue will be manageable.”

Barclays said the U.K. government is considering reducing an 8% surtax on bank profits. But the reduction will likely offset an increase in corporate taxes, analysts at London-based investment bank Shore Capital wrote in a note this week.

European bank shares have mostly rebounded in 2021 after plummeting last year as the coronavirus pandemic struck, forcing lenders to set aside billions of dollars in provisions for bad loans. Some of those provisions have been released this year as economies have opened back up. Barclays released £622 million of provisions in the first nine months of 2021, after setting aside £4.35 billion in the same period last year.

The biggest U.S. banks, which trade at higher book values than their European rivals, all reported double-digit profit gains in the third quarter. 

As world leaders and top financiers prepare to gather for the United Nations climate conference in Glasgow, Scotland, at the end of this month, Mr. Staley said he supported U.K. Prime Minister Boris Johnson’s efforts to make London a center for green finance.

Barclays last month helped the U.K. government raise £10 billion for a green bond, which must be spent on renewable energy and other environmental projects. Mr. Staley said sustainable financing presents a generational opportunity for banks.

“Climate today may be where technology was in 1995,” Mr. Staley said. “The investment in new forms of technology and energy, whether it’s hydrogen, whether it’s renewables, will be extremely robust.”

Write to Simon Clark at [email protected]