LONDON-- Barclays PLC said Thursday that a continuing slowdown
in fixed-income trading would push adjusted first-quarter profit
lower than in the same quarter last year.
The caution came in a brief trading update issued before its
annual shareholder meeting.
Barclays Chief Executive Antony Jenkins said there had been a
significant fall in first-quarter revenue in its fixed-income,
currency and commodities business--traditionally the main earnings
generator in its investment bank--"reflecting difficult market
conditions and a strong comparative performance for Q1 last year."
He said equities and investment banking was broadly flat on the
first quarter of 2013, and that the fixed-income decline was
partially offset by lower costs as the bank sheds jobs and exits
some businesses.
Barclays reported GBP1.79 billion ($3 billion) in adjusted
profit in the first quarter of 2013, driven by a strong quarter for
its investment bank. Its fixed-income, currency and commodities
operations generated GBP2.19 billion of revenue in the period.
Adjusted pretax profit strips out fluctuations in the value of the
bank's own debt and provisions to reimburse customers for mis-sold
products.
A sharp slowdown across the industry in fixed income trading
started in the second half of last year, though, as bond investors
curbed their activity to get ready for rising interest rates.
The bank will report its full first-quarter results on May 6,
and present an updated strategy for its investment bank on May 8.
Barclays on Tuesday said it is exiting most of its commodities
trading businesses after deciding they weren't making enough money
and didn't fit its strategy.
Later Thursday, Mr. Jenkins is to tell shareholders how the bank
will adapt to tougher economic conditions and regulatory rules that
are making parts of its business less profitable. He will also
defend the bank's decision to raise bonuses last year at the bank
despite a fall in profits.
Write to Margot Patrick at margot.patrick@wsj.com
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