© Reuters. Barclays may be let down by investment banking performance in next week's results
Proactive Investors – Barclays PLC (LSE:LON:) will be the second of the banks to report first-quarter results in the coming week, which will be the first formal updates since the collapse of Silicon Valley Bank, Signature Bank and Credit Suisse (SIX:).
The UK’s high street lenders are expected to show resilience in their balance sheets, while income will show the benefit of rising interest rates – though this is something that parliament is examining with the view that consumers are being taken advantage of.
While net interest margins may be notably increased from a year ago, there are not likely to be much moved from the end of 2022, said Gary Greenwood, Shore Capital’s banking analyst, giving headwinds from mortgage refinancing and expectations that lending is being tightened.
For Barclays and others with sizeable investment banks, revenues from this activity are likely to show a “mixed performance” against a relatively strong period this time last year, says Greenwood.
“We expect FICC trading to have held up well given ongoing market volatility, but equity trading is likely to have come under a little pressure while primary issuance and advisory fees will be weak. Overall, this may lead to some modest year-on-year reduction in revenue for the industry, albeit each bank will have its own idiosyncrasies.”
Barclays was reported to be on the verge of cutting investment banking roles this month, joining its New York peers.
For Barclays, the City consensus is for profits to be up from the preceding quarter but down year-on-year.
