By Elena Vardon
Barclays said profit edged higher as strong revenue growth was partially offset by a write-off linked to its credit exposure to a collapsed client and an increased provision for a U.K. car-loan probe.
The British bank on Tuesday posted a pretax profit of 2.81 billion pounds ($3.80 billion) for the first quarter, which was 3% higher than a year prior but missed consensus expectations slightly.
Group revenue rose 6% to 8.16 billion pounds, coming in a touch ahead of analyst forecasts. The increase was partly driven by higher net interest income--what it earns on loans minus what it pays out on client deposits--thanks to loan growth and hedging mechanisms designed to mitigate the impact of interest-rate moves.
Its top line was also supported by higher fees from its global markets and investment-banking operations within its largest division. While the conflict in the Middle East triggered late-quarter volatility that boosted equities trading, the gains lagged the lofty expectations set by the trading windfalls recently reported by major U.S. banks. Chief Executive C. S. Venkatakrishnan told reporters that unlike its Wall Street rivals, Barclays doesn't have a commodities business to capture the upside of the recent energy-market volatility and that its performance landed in the middle of the pack.
The executive described the quarterly performance as solid despite a one-off charge and impairments.
Barclays set aside more money than a year prior to cover bad loans, booking 823 million pounds in the quarter. This includes a 228 million-pound charge in the investment bank linked to an unnamed single exposure involving sophisticated fraud. That client is widely understood to be U.K. mortgage lender Market Financial Solutions, which is facing accusations in continuing court proceedings that it pledged collateral more than once.
Barclays previously lent to MFS investment vehicles, which in turn made loans to mortgage borrowers. Venkatakrishnan noted last month that the financial impact would be materially lower than the roughly 500 million pounds MFS owed the bank, downplaying broader market jitters regarding recent turbulence in the private-credit space.
"We are constraining lending to certain structured finance counterparties who operate more vulnerable business models and cannot convince us of the quality and independence of their financial controls," Venkatakrishnan said. "These entities neither represent a material exposure nor a material source of foregone income, but their risk far outweighs any reward."
Given increased macroeconomic uncertainty, the bank is also reducing its exposure to potentially vulnerable, highly leveraged corporate borrowers. Elsewhere, Barclays is seeing stable payment rates and rational borrower behavior from clients across its U.K. and U.S. consumer and corporate businesses, and is monitoring rising energy costs and inflation for potential hits to consumer spending and economic growth.
Separately, the lender also increased its provision for a longrunning U.K. regulatory probe into car-loan commission practices and a related redress plan by 105 million pounds. The group stopped providing this kind of financing in 2019 and has set aside 430 million pounds to cover the fallout.
Shares fell as much as 4% in early trading in London after what some analysts described as mixed divisional trends and pointed to the unexpected car-loan redress top up.
The bank stuck with its guidance for the year and the period through 2028. Earlier this year, Barclays set out new targets building on a turnaround plan laid out two years ago to revitalize the group by cutting costs, shrinking the share of its capital-consuming investment bank, and growing steadier businesses such as its domestic retail bank.
Barclays intends to kick off an up to 500 million-pound buyback once its current 1 billion-pound program completes.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
April 28, 2026 04:39 ET (08:39 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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