Barclays Q1 2023 earnings comfortably beat analyst forecasts with group attributable profit of £1.8bn up 27% y-o-y. Moreover, all operating divisions deliver double-digit returns.

Group income of £7.2bn is up by 11% year-on-year. Barclays UK income rises by 19%. This is primarily driven by net interest income growth from higher rates and continued structural hedge income momentum. Barclays reports a first quarter net interest margin (NIM) of 3.18%. up by 56 basis points from the year ago quarter.

Barclays Q1 2023 highlights

Barclays UK delivered a RoTE of 20.0%. This is supported by higher interest rates and the continued investment in its transformation into a next-generation, digitised consumer bank.

Profit before tax rises by 27% y-o-y to £754m with a RoTE of 20.0% (Q122: 15.6%). Total income is up by 19% to £1.96bn. Net interest income rises by 21% to £1.62bn with a NIM of 3.18% (Q122: 2.62%). Net fee, commission and other income rises by 11% to £343m partially driven by transactional income in Business Banking and UK cards. Personal Banking income increases by 23% to £1.25bn driven by higher interest rates, partially offset by mortgage margin compression. On the other hand, Barclaycard Consumer UK income falls by 11% y-o-y to £247m. Higher customer spend volumes were more than offset by lower interest earning lending balances following repayments and ongoing prudent risk management. Barclays cost-income ratio improves by 6 percentage points from the year ago quarter, from 63% to 57%.

Private banking income up by 21%

Private Bank income up 21% reflecting client balance growth and improved margins. Payments income is up by 10% driven by merchant acquiring turnover growth. Customer deposits at amortised cost decrease by 1% in the quarter to £254.3bn. Increases in savings product balances are more than offset by reduced current account and business banking deposits, reflecting broader market trends. The loan: deposit ratio remains at 90% (Dec-22: 87%).

Barclays share price is up by 2.5% on release of the results but down by 3% for the year to date.