Barclays profits more than double as bank beats estimates

Barclays said its first quarter profits more than doubled, on the back of a strong performance from its core business, which left the bank optimistic for the future.

In the three months to the end of March, pre-tax profits surged to £1.68bn from £793m in the corresponding period last year and better than the £1.46bn average estimate of analysts' forecast. Meanwhile, income rose to £708m from £651m in the first quarter of 2016 and revenue rose to £5.82bn, compared with £5.14bn last year.

The FTSE 100-listed bank added the positive opening quarter of the year was buoyed by a strong performance in both its investment banking division and its credit card business.

The sharp increase in profit came despite a one-off goodwill impairment charge of £884m on the the lender's stake in Barclays Africa Group, which the bank plans to sell by 2020.

"On Africa, we await approval for the separation arrangements already agreed with local management, following which we will be able to make further progress towards regulatory deconsolidation," said group chief executive Jes Staley.

He added the bank was planning to hire approximately 2,000 new staff in the UK over the next three years, who will be mainly focused on technology as part of a plan to bring technology development back within the bank to minimise reliance on external contractors.

The Barclays boss also indicated the bank would increase the number of staff in continental Europe, following Britain's Brexit vote and decision to leave the 28-country union.

Earlier this week, Staley said UK banks would begin the process of moving some operations to Europe fairly soon, in order to avoid any major post-Brexit disruption. "You will start to see movement in a reasonably short period of time," Staley said. The Barclays CEO also added that the process of changing financial contracts to a different jurisdiction and obtaining a licence to operate in continental Europe could both take up to 18 months.

Naeem Aslam, chief market analyst at Think Markets UK, said Barclays' first quarter results had "smashed" all estimates. "Barclays shares have not performed well so far this year, but if you look at the bank's stock achievement since Brexit, then you can't deny how strong the performance has been," he added.

"The bank's stock performance is much better among its peers such as Lloyds, UBS, Standard Charted and RBS over the last 10 month period."