Barclays Shares Fall as Revenue Misses Expectations

Shares in Barclays dropped approximately 5% at market open on Thursday as the British bank reported second-quarter profit that exceeded market views but fell short in terms of revenue. The company also reduced its net interest margin guidance for the year, leading to the decrease in share prices.

As of 0719 GMT, shares were down by 8.12 pence, reaching 155.94 pence.

Barclays stated that it now estimates the net interest margin for Barclays UK in 2023 to be less than 3.20%, as opposed to the previous estimate of over 3.20%. The current projection is around 3.15%.

For the three-month period ending on June 30, total income declined to £6.29 billion ($8.13 billion) compared to £6.71 billion from the previous year, falling below the estimated £6.53 billion. The bank attributed £3.27 billion of the total income to net interest income, which represents the difference between what banks earn on loans and what they pay clients for deposits, an increase from £2.42 billion reported last year.

Pretax profit reached £1.96 billion, surpassing both the £1.50 billion recorded the previous year and the estimated £1.91 billion from consensus. The increase in pretax profit was primarily driven by a credit impairment charge that was significantly lower than expected.

The net attributable profit for the FTSE 100-listed group rose to £1.33 billion from £1.07 billion, higher than the expected £1.24 billion, according to analysts' polls.

Barclays' common equity Tier 1 ratio, which indicates balance-sheet strength, remained at 13.8%, in line with expectations.

The company's board announced an interim dividend of 2.7 pence per share, matching market expectations and an increase from the 2.25 pence paid the previous year.

Furthermore, Barclays revealed plans to initiate a £750 million share buyback, surpassing analysts' expectations of a £575 million program.

Chief Executive C. S. Venkatakrishnan expressed confidence in achieving their targets for the full year going forward.