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Barclays' Profits Surge As Impairments Unwind, Income Rises

Tom Burroughes

24 February 2022

yesterday reported profit attributable to shareholders of £6.375 billion ($8.67 billion) for 2021, surging from £1.526 billion a year before, with results benefiting from a reversal of the large credit impairments in 2020 and rising income.

The UK-listed bank, which does not typically break out separate financial results for its wealth and investment business, said pre-tax profit came in at £8.414 billion against £3.065 billion. Total income rose 1 per cent year-on-year to £21.94 billion. 

However, Barclays did publish a line about its private bank, noting that total private bank total income for 2021 was £781 million, up from £707 million the previous year. Earlier in February, Credit Suisse signed a pact with Barclays to serve high net worth clients in Africa after the Zurich-listed lender decided to shut services in a variety of markets. It is also stepping up its presence in the Spanish wealth management market, celebrating its 100th anniversary of business in Monaco, and has been reviving its private banking business in Asia-Pacific.

Late yesterday morning, shares in Barclays were up by approximately 2.73 per cent.

Barclays said that its cost/income ratio was 66 per cent, widening a touch from a year before. Return on average tangible shareholders’ equity skyrocketed to 13.4 per cent from 3.2 per cent a year earlier. Banks around the world conserved capital in 2020, halting dividends, as the pandemic broke, but have since loosened some restrictions. Basic earnings per share also soared to 37.5 pence from 8.8 pence.

The Common Equity Tier 1 ratio – a standard international measure of a bank’s capital buffer – was 15.1 per cent at the end of 2021, unchanged from a year before.

In early November last year, Jes Staley, stepped down as chief executive of UK banking group Barclays amid pressure from regulators about how he described his relationship with convicted sex offender and financier Jeffrey Epstein. CS Venkatakrishnan, head of global markets, replaced him.

As noted here, Barclays is targeting ultra-high net worth individuals and family offices in Asia. The move also suggests that although the UK-listed lender had spun off some wealth and investment business in Asia half a decade ago, its links to Asia were never severed. Barclays has operated in the Asia-Pacific region for more than 50 years and, as far as the private bank goes, it is stepping up its presence.