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Barclays Q3 profit beats expectations, helped by lower provisions

Credit: REUTERS/Sergio Perez

Barclays reported much better than expected third quarter earnings on Friday, as its consumer businesses swung back to profit and provisions against bad loans fell compared with the previous quarter.

By Lawrence White and Iain Withers

LONDON, Oct 23 (Reuters) - Barclays BARC.L reported much better than expected third quarter earnings on Friday, as its consumer businesses swung back to profit and provisions against bad loans fell compared with the previous quarter.

Barclays reported profit before tax of 1.1 billion pounds ($1.44 billion) for the July-September period, double the 507 million pounds average of analysts' forecasts.

The British lender booked credit impairment and provision charges for the quarter of 608 million pounds, well below the 1 billion pounds analysts had expected.

However Barclays warned it is considering further cost-cutting measures, which could result in fresh charges although it has not decided on the scale or timing of these.

Barclays is the first major British bank to report third quarter earnings, with analysts and investors watching closely for signs of the expected wave of bad loans linked to the pandemic.

HSBC HSBA.L is next on Tuesday, with Standard Chartered STAN.L and Lloyds Banking Group LLOY.L set to follow on Thursday and NatWest Group NWG.L on Friday.

Barclays said its consumer, cards and payments business swung back to a profit of 165 million pounds, after a loss in the second quarter, as U.S. credit card spending recovered.

The combined effect of these better-than-expected results drove the bank's core capital ratio, a key measure of financial strength, to 14.6% against expectations of 14%.

($1 = 0.7656 pounds)

(Reporting By Lawrence White and Iain Withers Editing by Rachel Armstrong)

((lawrence.white@thomsonreuters.com; +44 207 542 6137; Reuters Messaging: lawrence.white.thomsonreuters@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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