Barclays Q3 Profit Rises 12% to £2.3bn Ahead of Expected UK Bank Tax Hike
Barclays announced a £500m share buyback after quarterly profits rose 12%, as the UK government prepares to raise taxes on banks in the upcoming budget.
At a glance
- Barclays posted £2.3bn in pre-tax profit for the third quarter, a 12% rise compared with the same period last year.
- The bank approved an extra £500m share buyback, bringing total shareholder returns to £2.8bn since January.
- The earnings precede the 28 October budget, where Chancellor John Healey is expected to raise taxes on banks.
Barclays reported a 12% increase in third-quarter pre-tax profits to £2.3bn and announced a £500m share buyback, arriving just days before the UK government is expected to raise taxes on the banking sector.
The results for the July to September period improved from £2.1bn recorded during the same quarter last year. Barclays chief executive CS Venkatakrishnan said the additional £500m share repurchase lifts the total capital returned to shareholders through buybacks and dividends to £2.8bn since January.
Budget pressure on lenders
The earnings come shortly before Chancellor John Healey presents the autumn budget on 28 October. Prime Minister Andy Burnham's administration is seeking extra revenue to fund public cost-of-living support programmes, placing bank profits under growing political scrutiny.
Barclays' earnings were lifted by a 6% increase in net interest income within its UK retail banking division, which generated £2bn. The metric measures the difference between interest charged on loans and paid on deposits. Lending margins have widened as interest rates climbed in response to inflation expectations linked to the war in Iran.
Union calls for higher taxation
The performance prompted criticism from the Trades Union Congress, which has urged the government to implement higher taxes on lenders. TUC General Secretary Paul Nowak stated that the UK's big four banks have generated £200bn in profit since 2021, arguing that high returns have come alongside elevated mortgage costs for households facing higher energy bills.
Healey, meanwhile, has signaled that the upcoming budget will support business growth and address operational expenses, telling the Times that the government aims to back profitable businesses and entrepreneurs navigating economic pressures.
Source: The Guardian World.
Questions and answers
- How much profit did Barclays make in the third quarter?
- Barclays generated £2.3bn in pre-tax profits between July and September, representing a 12% increase from £2.1bn in the same quarter last year.
- How much capital is Barclays returning to shareholders?
- Barclays announced a £500m share buyback, which raises its total distributions to shareholders via buybacks and dividends to £2.8bn since January.
- Why are UK banks facing potential tax increases in the budget?
- The UK government is seeking revenue to fund cost-of-living relief programmes in the 28 October budget amid union criticism over large bank profits during a period of high mortgage costs.
