Barclays Plc (BCS) - Get Barclays PLC Sponsored ADR Report shares fell sharply in London after the lender posted stronger-than-expected first quarter pre-tax profits but saw impairments increase and noted a slowdown in its trading division.
Pre-tax profit rose to £1.682 billion, the company said, beating the £1.469 billion estimate compiled by FactSet. Total income at £5.823 billion was largely in-line with estimates, but its credit impairment charges grew 19% to £527 million, thanks to a one-off £884 million goodwill hit to its Barclays Africa Group.
"This has been another quarter of strong progress towards the completion of the restructuring of Barclays," said CEO Jes Staley. "The earnings power of Barclays enabled us to take actions in the quarter including the redemption of US dollar preference shares, the purchase of shares for employee awards, and pension contributions, while still improving our CET1 ratio to 12.5% through organic capital generation, and that is pleasing."
Barclays said first quarter pre-tax profits at its Corporate and Investment Banking unit grew 12.7% from the same period last year to £790 million, although operating expenses also rose to £1.94 billion from £1.8 billion in the first quarter of 2016.
The markets division within the unit, which houses bond, currency and stock trading, saw income fall 4% to £1.35 billion -- with equities down 10% -- as European banks continue to loss ground to their American rivals.
Barclays shares fell more than 5% by 11:00 BST in London to change hands at 212.6 pence each, wiping out the year-to-date gain compared to a 1.1% rise for the FTSE 100 and a 7.81% advance for the Stoxx Europe 600 Banks index.