Barclays 1Q24: NII Positive, Credit Metrics Solid

Barclays (Baa1, BBB+) 1Q24 results are a minor spread positive with solid loan loss performances and improvements showing in US cards. NII was relatively stable which is likely to please equity investors today, we feel.

• Key credit metrics: CET1 is broadly in line (13.5% vs. 13.4% est.) and loan losses are 10% better than expected (at 51bp, 3bp better than 4Q23), driven by improvements in the US. Non-performers are nominally flat vs. Dec-23 and broadly in line with expectations.
• Wider view: revenues are 1% better than expected with FICC a large underperformer (-19%) but better figures from equities +30%) but better performances in some of the core retail businesses. Costs are broadly in line driving the 6% net income beat.
• Outlook: there appear few changes here but 1Q24 did beat the FY24 RoE target, this target not currently being discounted in consensus. The company expects to be a “net negative AT1 issuer” this year (with GBP2.8bn becoming callable).

Conf call is 0930 (London time) at https://www.netroadshow.com/events/login?show=09e2014f&confId=63702