Barclays profits slide but income boosted by higher interest rates

Barclays has revealed its profits fell by 14% to £7 billion in 2022 as it set aside £1.2 billion to cover expected loan losses amid rising mortgage rates.

The banking giant felt the knock-on effects of a £1.6 billion hit from dealing with a US trading blunder last year, bringing it down from the £8 billion pre-tax profits it raked in in 2021.

But Barclays said its net interest income surged by 13% to £5.9 billion as it profited from higher rates, and its group income was up by 14% year-on-year to £25 billion.

The lender said it expects its net interest margin – the difference between what it charges for loans and pay for savings – to rise above 3.2% this year, taking it much higher than the mid-2020 lows of around 2.5%.

It also said that activity in its investment banking business had been more subdued in 2022 amid waning investor confidence and a dearth in company deals.

CS Venkatakrishnan, Barclays group chief executive, said: “Barclays performed strongly in 2022. Each business delivered income growth, with group income up 14%.

“We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”

Barclays revealed that Mr Venkatakrishnan, known within the group as Venkat, took home £5.2 million in cash and bonuses last year, and is set to see his fixed pay jump by 3.4% this year.

The group’s finance director, Anna Cross, earned £2.1 million during the year and will enjoy a 4.3% increase in fixed pay this year.