Its results for the period showed gross mortgage lending was stable compared to the previous quarter where it lent £5.5bn.
Barclays said the drop in loans issued was driven by “subdued mortgage lending” and lower business banking balances due to the repayment of government scheme lending.
Its loans and advances to customers fell from £205.1bn as of December 2022 to £204.9bn as of 30 September 2023.
Barclays UK reported a net interest margin of 3.04 per cent up from 3.01 per cent in 2022. Compared to Q2, this was 18 basis points down on 3.22 per cent.
Compared to last year, there was a smaller impairment charge in Q3 of £59m down from £81m in 2022. The lender attributed this to “strong credit performance” and a moderated unemployment outlook. However, it noted that higher interest rates were resulting in missed payments on tracker mortgages.
Year-on-year, Barclays UK’s profit before tax in Q3 was relatively flat at £765m, compared to £762m in Q2 2022.
Year to date performance
The bank completed £18.1bn in gross UK mortgage lending in the nine months to September, down on £21.7bn last year.
The net interest margin for the year to date was 3.15 per cent up from 2.78 per cent last year and the group said for the whole of 2023, it expected this to sit between 3.05 per cent and 3.1 per cent for the UK business. Barclays said this was dependent on deposit balances and interest rate expectations.
For the year to date, Barclays UK’s net interest income totalled £4.8bn, which was slightly higher than the £4.2bn generated last year. For the Q3 period, this was flat at £1.5bn.
Credit impairments on rise
Barclays UK more than doubled its credit impairment charges for the year to date from £129m last year to £267m this year. It put this down to “updated macroeconomic scenarios” citing improving GDP and unemployment against a backdrop of higher interest rates and a weaker house price market.
The wider group reported a profit before tax of £1.9bn for Q3, slightly down on £2bn last year. For the year to date, this came to £6.4bn which was up on the previous year’s £5.7bn.
C.S. Venkatakrishnan, group chief executive of Barclays, said: “We delivered an 11 per cent return on tangible equity in Q3, against a mixed market backdrop, as we continued to manage credit well, remained disciplined on costs and maintained a strong capital position, with a Common Equity Tier 1 (CET1) ratio of 14 per cent.
“We see further opportunities to enhance returns for shareholders through cost efficiencies and disciplined capital allocation across the group.”
