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By Lawrence WhiteLondon — Barclays’ first-half profits rose by a better-than-expected 17% as it reaped bumper equities trading revenues from volatile markets, although its shares dropped on Tuesday in a sign of high investor expectations for British banks.Profit before tax for the January-to-June period of £6.1bn was just above forecasts of about £5.94bn, but Barclays shares fell nearly 5% as analysts said its equities performance undershot market expectations boosted by Wall Street rivals’ bumper quarter.Barclays, whose stock price has risen nearly 50% in the last year, also announced a fresh share buyback of £1bn, above forecasts for £831m, and dividends worth £800m as it returns excess capital to shareholders. The bank’s performance was also tarnished by an additional £500m in expected costs for the second half of the year, which it said included streamlining efforts.“We anticipate spending up to £300m in structural cost actions, directly related to making the organisation simpler, such as platform change processes,” CFO Anna Cross told reporters on a conference call.On trackBarclays also slightly upgraded its income guidance for the year from £31bn to £31.5bn and said it was on track to meet its performance goals for 2026.Barclays’ investment bank, which differentiates it from domestic-focused UK rivals such as Lloyds and NatWest, delivered total income of £4bn in the second quarter of the year compared with analysts’ forecasts for £3.7bn. Revenues from equities rose 45% in the quarter compared with the same period last year, Barclays said. That lagged Wall Street rivals, which were up an average 69% in equities, aided by the SpaceX IPO that helped supercharge earnings.Barclays also logged a disappointing 1% gain in fixed-income trading, its traditional strength, against a 13% average rise for the top five US banks, a Reuters calculation showed.Volatility in financial markets triggered by the Iran war has driven a trading frenzy that has boosted banks’ revenues, while blockbuster M&A deals and IPOs have fuelled fees.Eyes on BurnhamBarclays is the first big British bank to report earnings this week, as the country’s lenders warily eye Andy Burnham, the country’s seventh prime minister in the last decade.Having reaped record profits in recent years, banks have been concerned the left-leaning leader might hike taxes on them. They received a boost on Friday, however, when Reuters reported Burnham’s administration is likely to preserve the previous one’s pro-growth approach to financial services.
