Barclays sees profits surge as tariffs turmoil boosts trading activity

Barclays has seen profits surge by nearly a fifth thanks to a boom in trading activity sparked by recent turmoil in financial markets after Donald Trump triggered a global trade war.

The UK banking giant reported a better-than-expected 19% rise in pre-tax profits to £2.72 billion for the three months to March 31, with income across its investment banking division soaring by 16% to £3.9 billion as it cashed in on the trading frenzy.

But the lender also revealed it set aside more cash for bad debts due to worries over the American economy after the US President announced sweeping increases to trade tariffs worldwide.

Barclays increased provisions for loans expected to turn sour to £643 million from £513 million a year ago, largely driven by £74 million put by for “elevated US macroeconomic uncertainty”.

The group said it “continues to monitor the heightened uncertainty in the near-term macroeconomic outlook, especially in the US”.

Barclays has an exposure to the tariff woes and US economy through its sizeable operations in America, where it has 20 million customers.

But group chief executive CS Venkatakrishnan, known within the bank as Venkat, cheered a robust first three months of the year as he said the investment banking boost has outweighed the hit to deal-making from tariff and economic uncertainty.

He said the group remains “very committed” to its US business, despite the clouded outlook for the American economy.

“I am very pleased with our performance in the first quarter, which represents another strong quarter of execution,” he said.

“As you would expect during a period of uncertainty, client confidence is delaying investment banking decisions, but this has been more than offset by the benefits of the impact on activity in trading markets,” he added.

While Barclays kept its overall outlook unchanged for 2025, the group increased its guidance for net interest income – a key measure for retail banks – to more than £12.5 billion from around £12.2 billion previously, with some £7.6 billion now expected from the UK arm thanks to strong demand from savings customers.

Venkat added a note of caution, however, saying that “transactional and lending income could slow as corporates and individuals become more cautious”.

“We remain confident in our outlook and position ourselves carefully to navigate through these current circumstances,” he said.

The results show the business also delivered around £150 million in cost savings in the first quarter as part of its ongoing three-year overhaul.

Analysts at Jefferies said the figures from Barclays are a “decent set of numbers”.

“The corporate investment bank was standout, with revenue 9% ahead of expectations,” they added.