Barclays full-year net profit quadruples as corporate and investment bank booms

LONDON — Barclays on Wednesday reported a full-year net profit of £6.38 billion ($8.67 billion) for 2021, ahead of analyst expectations of £5.75 billion, as its corporate and investment banking division boomed.

Fourth-quarter net income attributable to shareholders came in at £1.12 billion, outstripping a mean forecast of £756.5 million, according to Refinitiv data.

The figures marked a significant improvement from the £1.53 billion net profit reported in 2020 and £220 million in the fourth-quarter of that year, as the U.K. navigated fresh nationwide Covid-19 lockdowns.

The British lender endured a turbulent final quarter of 2021, with longtime CEO Jes Staley resigning in November following an investigation by regulators into his relationship with Jeffrey Epstein. He was replaced by C.S. Venkatakrishnan.

After the bank’s third-quarter earnings, Staley said 2021 was going to be “quite a year” for Barclays, as a significant boost from its corporate investment banking division continued to propel the group’s return on tangible equity — a key ratio used to assess profitability.

Profit before tax in the corporate and investment bank hit a record £5.8 billion, including record investment banking fees and equities income.

Here are the other financial highlights:

• Common equity tier one capital (CET1) ratio was 15.1%, down from an all-time high of 15.4% at the end of the third quarter and equal to 15.1% in the final quarter of 2020.
• Return on tangible equity (ROTE) was 13.4%, compared to 14.9% in the third quarter and 3.2% for the fourth quarter of 2020.
• Net interest margin (NIM) was 2.52%, compared to 2.61% at the end of 2020.
• The bank released £700 million in credit impairment provisions, versus a £4.8 billion charge in 2020.
• Full-year profit before tax was £8.4 billion, up from £3.1 billion in 2020.

Barclays CEO C.S. Venkatakrishnan said in a statement Wednesday that 2021 was the year in which the bank’s strategy set out in 2016 came to fruition, with double-digit return on tangible equity, a “well-capitalised balance sheet” and strong profit performance even against the backdrop of the pandemic.

“I am proud that we have delivered this resilient performance while continuing to support our clients and customers through another year of COVID-19 related challenges,” Venkatakrishnan said.

“Taken together, our 2021 performance has enabled us meaningfully to increase returns to our shareholders, with £2.5 billion of excess capital returned via a total dividend of 6.0 pence per share and £1.5 billion of announced share buybacks.”