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Barclays (BARC.L) has posted a 19 per cent surge in pre-tax profits to £2.72 billion for the first quarter, but the bank is bracing for economic headwinds.
Growing concerns over the US economy and escalating global trade tensions have led the banking giant to bolster its reserves for potential bad debts.
While profits jumped by almost a fifth in the three months to March 31, Barclays increased its loan loss provisions to £643 million, up from £513 million a year earlier.
A significant portion of this increase, £74 million, is specifically attributed to "elevated US macroeconomic uncertainty".
The bank acknowledged the current climate of "heightened uncertainty in the near-term macroeconomic outlook, especially in the US".
Barclays' substantial US operations make it particularly vulnerable to the fallout from the ongoing trade war initiated by President Trump. The bank will continue to monitor the situation.
However, group chief executive CS Venkatakrishnan, known within the bank as Venkat, cheered a robust first three months of the year, confirming the lender is on track for 2025 and 2026 guidance.
He said: “I am very pleased with our performance in the first quarter, which represents another strong quarter of execution.”
While it kept its outlook unchanged, the group increased its guidance for net interest income – a key measure for retail banks – to more than £12.5 billion from around £12.2 billion previously, with some £7.6 billion now expected from the UK arm.
The results show it also delivered around £150 million in cost savings in the first quarter as part of its ongoing overhaul.