Barclays profits slide but income boosted by higher interest rates
The banking giant said it set aside £1.2 billion in 2022 to cover expected loan losses amid rising mortgage rates.
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Your support makes all the difference.Barclays has revealed its profits fell by 14% to £7 billion in 2022 as it set aside £1.2 billion to cover expected loan losses amid rising mortgage rates.
The banking giant felt the knock-on effects of a £1.6 billion hit from dealing with a US trading blunder last year, bringing it down from the £8 billion pre-tax profits it raked in in 2021.
But Barclays said its net interest income surged by 13% to £5.9 billion as it profited from higher rates, and its group income was up by 14% year-on-year to £25 billion.
The lender said it expects its net interest margin – the difference between what it charges for loans and pay for savings – to rise above 3.2% this year, taking it much higher than the mid-2020 lows of around 2.5%.
We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023
It also said that activity in its investment banking business had been more subdued in 2022 amid waning investor confidence and a dearth in company deals.
CS Venkatakrishnan, Barclays group chief executive, said: “Barclays performed strongly in 2022. Each business delivered income growth, with group income up 14%.
“We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”
Barclays revealed that Mr Venkatakrishnan, known within the group as Venkat, took home £5.2 million in cash and bonuses last year, and is set to see his fixed pay jump by 3.4% this year.
The group’s finance director, Anna Cross, earned £2.1 million during the year and will enjoy a 4.3% increase in fixed pay this year.