For some time, hovering rates of interest have been simply the tonic C.S. Venkatakrishnan wanted to cover Barclays’ many, many ills whereas he tried to determine a longer-term treatment. They helped paper over the distress at its funding financial institution whereas additionally providing a pleasant fillip to its retail financial institution.
Venkat’s nonetheless engaged on a remedy plan, however the central financial institution snake oil is carrying off: Not solely has the profit for the benighted I-bank peaked, however these fats web curiosity margins are beginning to slim down.
Finance Director Anna Cross mentioned clients have been reacting rationally to the best charges in 15 years, with greater than 1 / 4 of mortgage clients overpaying on their loans. She mentioned there’s “not a huge amount of growth in the market but it is extremely active” as debtors hunt for the most affordable offers doable…. Trading income fell 41% on a 12 months in the past to £1.75 billion. Revenue from the financial institution’s flagship fixed-income buying and selling division fell 22% to £1.2 billion whereas equities buying and selling income fell 60% to £563 million….
Even if charges proceed to rise, Barclays is unlikely to see additional enhancements in web curiosity earnings as shoppers turn out to be extra delicate to fee modifications on their deposits, Cross mentioned on an analyst name.
Barclays Shares Drop as UK Lender Signals End of Rates Boom [Bloomberg via Yahoo!]
