Barclays cashes in on rate rises and deposits 

Barclays cashes in on rate rises and deposits as customers switch accounts amid the global banking crisis

Barclays benefited from a £10billion influx of deposits as anxious customers switched accounts amid a global banking crisis.

The group was also boosted by rising interest rates as its first-quarter profits climbed 16 per cent to £2.6billion, the highest level in 12 years.

Shares rose 5.3 per cent, or 8.18p, to 162.04p as the results suggested Barclays has emerged relatively unscathed from turmoil which shook the sector last month. 

Riding the storm: Barclays was boosted by rising interest rates as its first-quarter profits climbed 16% to £2.6bn, the highest level in 12 years

Chief executive CS Venkatakrishnan – known as Venkat – said robust risk management ‘has helped insulate Barclays from recent events’.

It was the first major UK bank to report on a tumultuous period when bank stocks across the world came under severe pressure.

Credit Suisse saw a £55billion customer exodus in the quarter while troubled US lender First Republic endured a £58billion fall in deposits, with the revelation fuelling a renewed sell-off. 

Venkat said: ‘We have seen volatility in elements of the banking sector. They have been very specific to the institutions involved but it does cast a bit of a shadow.

‘That’s calmed down a lot but it’s not completely disappeared as we’ve seen in the last few days in the US.’

The bank grew deposits by £10billion to £556billion, mainly from business clients. 

In the UK, income from personal banking climbed 23 per cent to £1.3billion, driven by higher interest rates. 

Venkat said the outlook for the UK and US was ‘a little better’ than six months ago, adding: ‘That doesn’t mean we’re out of the woods.

‘It’s better than we thought it would be but still not back to what we would consider having achieved a soft landing. That requires us to be a little cautious still.’

Meanwhile, Deutsche Bank profits were up 9 per cent to £1billion but it said it will axe 800 jobs.

Staley claims ‘serious’ 

The Barclays boss said new allegations about former chief executive Jes Staley were ‘very serious’ – but defended the board’s handling of the episode.

Claims about Staley’s relationship with paedophile Jeffrey Epstein have emerged in US court cases, which Staley’s lawyers have described as ‘baseless’. 

The board backed Staley when regulators probed the links in 2020 but he quit in 2021.

Venkat told Bloomberg: ‘While I was not a member of the board, I know individually and collectively that they employ very careful and detailed processes to reach their decisions.’