What happened
Shares of the British bank Barclays (BCS +1.45%) traded more than 10% lower in the final hour of trading today after the bank reported earnings results from the first quarter of this year.
So what
Barclays, which is one of the largest banks in the U.K. with the equivalent of $1.91 trillion in total assets, reported a profit equivalent to $2.37 billion on total revenue of $8.15 billion. Total revenue declined year over year, but total profits jumped significantly. The results surpassed analysts' expectation for profits.
Credit impairment charges for potential loan losses also decreased significantly year over year from the equivalent of $2.9 billion in the first quarter of 2020 to $76 million at the end of the first quarter of this year.
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"In the quarter we actually saw a decrease in defaults, as government support schemes, particularly in consumer, were extended, and we had no material single name wholesale loan charge," Tushar Morzaria, Barclays group finance director, said on the company's earnings call.
Now what
Despite the more positive quarter, revenue in Barclay's corporate and investment banking division declined on a year-over-year basis during a time when a lot of investment banks are reporting extremely strong results.
Additionally, costs increased 10% in the quarter from the first quarter of 2020, and the bank is guiding for costs on a full-year basis to be higher than 2020, so these issues together appear to be spooking investors.
