British number three bank Barclays lost two percent today after maintaining annual profit forecasts but failing to calm fears about costs and sustainability of profits into the future.
In a trading update Barclays notes costs continue to outpace revenue from acquisitions, staff increases, and higher regulatory costs. While 18 percent growth for this year sounds good, that is two points down on last time around, and analysts fear that in a rising interest rate environment the bank could lose ground and profits could crash. Retail banking was flat, but investment banking did well, although it was now taking fewer risks compared to in the first half of the year, and lending less. Growing revenue and cutting costs in the UK will now be the focus over the next three years says the bank.