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Barclays (NYSE:BCS) stock tumbled 6.4% in U.S. trading late Tuesday morning after the bank finetuned guidance for its U.K. bank’s net interest margin. It also said potential cost-cutting measures could lead to material additional charges in Q4.
The company now expects Barclay UK’s net interest margin to be 3.05%-3.10% in 2023, compared with its prior guidance of less than 3.20%.
While Barclays (BCS) said it’s evaluating actions to reduce its structural costs, its guidance for cost:income ratio percentage, impairments, CET1 ratio, and capital returns remains unchanged.
“We see further opportunities to enhance returns for shareholders through cost efficiencies and disciplined capital allocation across the Group,” said Barclays (BCS) CEO C.S. Venkatakrishnan.
Q3 net interest income of £3.25B (US$3.96B) slipped from £3.27B in Q2 and increased from £3.07B in Q3 2022. Net fee, commission, and other income of £3.01B edged down from £3.02B in the prior quarter and rose from £2.88B a year ago.
Barclays UK net interest margin came in at 3.04% in Q3 2023 compared with 3.22% in the previous quarter and 3.01% a year ago.
Q3 operating costs of £3.95B increased from £3.92B in Q2 and £3.94B in Q3 2022, the company said.
Profit before tax was £1.89B, down from £1.96B in Q2 and £2.35B in Q3 2022.
Loan loss rate of 42 basis points increased from 37 bps in the prior quarter and 36 bps in the year-ago period.
Return on average tangible shareholders’ equity slipped to 11.0% in Q3 2023 from 11.4% in Q2 and 12.5% in Q3 2022.
Earlier, Barclays (BCS) reports Q3 earnings; warns of big cost cuts as profits dip