LONDON, Oct 21 Reuters - Barclays reported better than expected third quarter earnings on Thursday as it followed Wall Street rivals in reaping bumper investment banking fees from a surge in trading and advisory mandates.
The British bank reported profit before tax of 2 billion pounds $2.76 billion for the July-September period, better than the 1.6 billion pounds average of analysts' forecasts and double the 1.1 billion pounds it made in the same period a year ago.
Barclays' advisory and equities business had their best performance in the first nine months of the year on record, Barclays said, driving a return on equity for the overall investment bank of 16.4% compared to 10.5% a year ago.
The results were boosted by the bank releasing 622 million pounds of cash set aside for bad debt charges that have yet to materialise, after government support measures propped up businesses.
The provision release comes despite a turbulent period for the British economy, with supply chain disruptions and fuel shortages that flared up in September denting consumer and business confidence.
The bank nevertheless upgraded its economic forecasts for the UK, which had been among the most pessimistic of British banks, saying default rates remain low.
While the CIB investment bank performance continues to be an area of strength for the group, we are also seeing evidence of a consumer recovery and the early signs of a more favorable rate environment, Barclays CEO Jes Staley said.