Barclays beats Q3 profit forecasts but cuts NIM guidance

(Sharecast News) - Third-quarter headline profits at Barclays were ahead of analysts' forecasts, but the bank cut its guidance for retail banking net interest margin (NIM) for 2023, leading to a sharp fall in the share price on Tuesday morning. The full-year Barclays UK net interest margin - the difference between interest income and the amount it pays back in interest on deposits - was revised to 3.05-3.10%, down from earlier guidance of 3.15-3.20%.

"Guidance is sensitive to the level and mix of deposit balances and further changes in expectations for interest rate," the company said.

The stock was down nearly 7% at 134.42p in early deals.

Barclays reported that pre-tax profit in the three months to 30 September came in at £1.89bn, down 2% year-on-year but well ahead of the consensus forecast of £1.77bn.

Total income for the quarter came to £6.26bn, down 2% on last year, as a decent performance from its international consumer, cards and payment division (up 9% at £1.36bn), was offset by a 6% fall in investment banking to £3.08bn.

Barclays' UK retail banking income declined by 2% to £1.83bn, as improvements in business banking income were offset by a slip in personal banking and sharp fallings in the Barclaycard Consumer unit.

Group return on tangible equity was 11%, bringing year-to-date RoTE to 12.5%, while the common equity tier 1 (CET1) ratio improved to 14% from 13.5% at the half-year stage.