The bank also reported notable growth in profits in Q2 2023, with a 24% increase from the same period last year, reaching £1.3bn, which exceeded analysts’ predictions of £1.2bn. 

The surge in profits was attributed to Barclays’ retail banking and corporate business benefiting from a rise in interest rates, mitigating the drop in revenue from its investment bank’s trading and dealmaking activities.

However, the profit comparison with the previous year was skewed due to the £1.3bn in litigation and conduct charges taken in 2022 versus a much smaller figure of £33 million in 2023. When adjusted for this, there was in fact a 6% drop in profits. Similarly, overall group revenue saw a 6% decrease, settling at £6.3bn, falling short of the forecasted £6.5bn.

The UK retail lending unit performed well, with a profit increase of 17%, due to favourable conditions from increased interest rates. However, there was a slump in the investment bank’s income, dropping 22% to £3.2bn in the quarter, reflecting the trends on Wall Street.

C. S. Venkatakrishnan, group chief executive, said: “We have positioned Barclays carefully for this mixed macroeconomic environment and delivered a consistent performance in the second quarter.

“Through our diverse sources of income, prudent risk management, and ongoing cost discipline we have again demonstrated the stability and strength of the franchise we have built over many years.

“This means we are able to distribute increased capital returns to shareholders, while providing targeted support to our customers and clients. Looking forward we are very confident of meeting our targets for the full year.”

Barclays also announced a £750m share buyback, up from the £500m completed in H1 2023. Despite this, the bank’s share price dropped 5% in early London trading.