Shares in the company tumbled by more than 8 on Tuesday morning after it gave an update on its financial performance for the third quarter.
Barclays reported lower earnings and cut its profitability forecasts, as it revealed it is considering cutting costs
It reported a pre-tax profit of £1.9 billion for the three months to September, slightly ahead of analysts’ expectations but below last year’s £2 billion profit. Group chief executive CS Venkatakrishnan, known within the group as Venkat, said: “We are trying to make, create, and run a more efficient organisation… you should expect us to look in all of those places where we can increase productivity.”
Like other lenders, Barclays has benefited from higher interest rates, which have driven up mortgage costs, boosting income throughout the year. Deposits are unlikely to pick up in the fourth quarter, leading the bank to cut its forecast for net interest margin – an important measure showing the difference between what it earns from loans and pays out for deposits.
“As such, the bank has reduced its NIM outlook to between 3.05% and 3.1%, down from a previously guided 3.2% and a 3.22% performance in the second quarter.”Meanwhile, higher rates and weaker house prices prompted Barclays to increase its credit impairment charges to £433 million for the period, up from £381 million last year.
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