Barclays Plc posted first-quarter revenue that topped analyst estimates after its stock traders collected a surprise windfall from tumultuous global markets.
Shares of US-listed rose 5.4% in premarket trading Thursday.
Revenue tied to the British bank’s global markets business slipped to £2.3 billion ($2.87 billion) in the first quarter, topping the £2.19 billion average of analyst estimates compiled by Bloomberg.
The unit’s results were helped by a 25% surge in equities trading revenue, which was enough to offset lower-than-expected results from its fixed income markets division, which is a larger business for the British bank.
“On equities we’ve done extremely well,” CEO C.S. Venkatakrishnan said in an interview from the stock trading floor with Bloomberg Television. “Securitized products has done very well, on the rates side in Europe we’re a little weaker.”
The subdued quarter from the FICC business stood in contrast to Deutsche Bank AG’s traders, who delivered a 7% jump in the first quarter, more than analysts had expected and better than most of the biggest US investment banks.
Earlier this year, Venkatakrishnan revamped Barclays’s business structure and set more ambitious financial targets in a wide-ranging investor presentation. The CEO and his chairman Nigel Higgins have come under increasing pressure from investors as Barclays struggles with mediocre returns and a lagging share price.
Barclays UK — the lender’s retail unit focused on its home country — posted revenue of £1.83 billion, which topped expectations. It was helped by the company’s structural hedge program, a balance sheet exercise the lender uses to protect against interest rate movements.
Net interest income in the unit slipped 4% as Barclays faced continued pressure from savers moving their money into higher-rate alternatives.
Revenue tied to the company’s investment banking businesses also topped estimates, aided by a 18% surge in debt underwriting fees.
The better-than-expected Wall Street results echo a similar showing from Barclays’s US rivals earlier this month. Banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. all posted first-quarter trading and capital markets revenue that topped analyst estimates.
Total net income for the quarter slumped 13% to £1.55 billion, beating the £1.47 billion that analysts were expecting.
Barclays posted a return on tangible equity of 12.3%. The company still expects that metric to be above 10% for the year.
The company has offloaded a portfolio of performing Italian retail mortgages and is in discussions to sell non-performing portfolios of Swiss-Franc linked Italian retail mortgage
