By Lawrence White
LONDON - Barclays reported its third quarter profit rose slightly from the previous year, beating market expectations, as a strong performance in fixed income trading helped alleviate loan losses and the impact of a trading error earlier in the year.
The British bank reported on Wednesday it earned a profit before tax of 2 billion pounds ($2.29 billion) in the July-September period, up from 1.9 billion pounds in the same period a year ago and above the 1.8 billion pounds average of analysts' forecasts compiled by the bank.
Barclays reported income in the fixed income, currencies and commodities business (FICC) rose 63% in the first nine months of the year, as volatile markets saw heavy trading by clients.
Barclays' recent performance has been marred by a trading blunder that saw it agree a penalty of $361 million with U.S. regulators for "staggering" failures that led it to oversell nearly $18 billion worth of investment products.
The bank's results also come amid the most turbulent period in Britain's politics and economy since the 2016 Brexit referendum, with Rishi Sunak appointed Prime Minister on Tuesday following the implosion of Liz Truss's administration.
Truss's programme of unfunded tax cuts to fuel growth triggered a crisis of investor confidence that led to a spike in mortgage prices, piling pressure on borrowers.
That came on top of an already worsening cost of living crunch for customers, sparking fears that banks which had been benefiting from higher interests rates will suffer more loan losses from squeezed household finances.
($1 = 0.8731 pounds)