Income from its personal banking division, which includes mortgage lending, rose 11 per cent to £1.02bn which it said was driven by rising interest rates and strong mortgage origination in 2021.
Loans and advancements to customers fell by one per cent to £207.3bn. Despite a £1bn growth in mortgage lending, this was offset by a £2.3bn decline in business banking balances following the repayments of government loans. Net mortgage balances rose £1bn quarter-on-quarter and £7.2bn annually.
Barclays’ current UK mortgage balance is £159.1bn, up from £158.1 in the previous quarter and flat on the same period last year.
The UK division’s net interest income rose five per cent to £1.3bn during the period with a net interest margin of 2.62 per cent. It said this was primarily driven by the UK’s rising rate environment.
The wider business
The Barclays group reported a seven per cent decline in profits, down to £2.2bn.
Its costs amounted to £4.1bn including litigation, conduct charges of £500m relating to the over-issuance of securities by its US business, and customer remediation costs. Last year, the bank was fined £783,800 by the Financial Conduct Authority for failing to properly oversee its business with Premier FX.
C. S. Venkatakrishnan, group chief executive of Barclays, said: “Our performance includes the relevant costs relating to the over-issuance of securities in the US and customer remediation of a legacy loan portfolio.
“Our income growth was driven partly by global markets, which has been helping clients navigate ongoing market volatility caused by geopolitical and economic challenges including the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK.”
Venkatakrishnan also noted the cost of living crisis, saying the bank was ready to support its customers.
He said: “We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs.
“We will support them through this difficult period wherever we can, and support the wider economy just as we did through the Covid-19 pandemic.”