Barclays ups dividend and announces buyback as profits quadruple

·Senior City Correspondent, Yahoo Finance UK
·2-min read
Barclays bank in Knightsbridge, London. Photo: AP
Barclays bank in Knightsbridge, London. Photo: AP

Barclays (BARC.L) unveiled bumper half-year profits on Wednesday, buoyed by surging activity at its investment bank and equities business.

Barclays reported a pre-tax profit of £5bn ($7bn) on net income of £12bn in the first six months of 2021. Profits were nearly quadruple the £1.1bn made in the first half of 2021.

The bank was buoyed by record second quarter income at its investment bank and equities business, as well as the release of £742m in reserves built up last year to weather a possible COVID storm. Fixed income trading and consumer credit suffered weakness in the period.

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“This has been a strong first half, clearly demonstrating the benefits of our resilient and diversified universal bank in supporting the growth of capital markets, our corporate clients and retail customers," chief executive Jes Staley said in a statement.

Barclays made a pre-tax profit of £2.6bn in the second quarter on revenues of £5.4bn. Analysts had expected Barclays to report a second quarter pre-tax profit of £1.7bn on net income of £5.3bn.

The bank announced plans for a 2p a share dividend and said it would buyback £500m in shares. Barclays completed a £700m buyback in April. Earlier this month the Bank of England scrapped restrictions on shareholder payouts

Shares in the bank popped over 5%.

Barclays' stock leapt higher on the update. Photo: Yahoo Finance UK
Barclays' stock leapt higher on the update. Photo: Yahoo Finance UK

Staley was bullish on the outlook for the second half of the year.

"We are starting to see the resurgence of activity across our businesses," he said. "Our CIB business is well-positioned to benefit from continued growth in debt and equity capital markets, with Global Markets and Investment Banking fees income up 36% since 2019, and our strong retail businesses are poised to support and benefit from a consumer recovery."

Paula Smith, head of banking at KPMG UK, said: "Whilst banks have broadly fared well over the course of the pandemic, there is still a long way to go with governmental support mechanisms just beginning to wind down and question marks remaining over the economy."

Staley said: "We are mindful that this support will need to continue as we see the pandemic subside."

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