Barclays investment bank revenue takes nosedive in Q3

Low levels of volatility blamed for poor performance of investment banking business.

Revenues at Barclays’ corporate and investment bank business dropped by almost 20% in Q3, with all major business lines down.

A tough set of results for Barclays, published this morning, has sent shares diving down over 6% by 9:30am. The group as a whole saw sales drop 5%, though the investment banking business was particularly badly affected.

Total income for the corporate and investment bank division dropped from £2.8 billion in Q3 2016 to £2.28 billion this year, an 18% fall. But this was primarily due to poor performance in the markets business, which lost 31% of its sales as a whole.

Equities and Credit business were down 24% and 22% respectively, while macro trading revenues fell by 40%. Profit before tax for the investment bank fell 33% from £885 million in Q3 2016 to just £593 million in the most recent quarter.

Barclays said the fall in sales was due to low levels of market volatility compared to a very volatile Q3 last year, when markets were rocked by the UK’s vote to leave the European Union.

It added that business was also impacted by integrating some non-core assets and non-recurrence of treasury gains.

Barclays group CEO, James E Stanley, said: “The third quarter was clearly a difficult one for our Markets business within BI [Barclays International]. A lack of volume and volatility in FICC hit Markets revenues hard across the industry, and we were no exception to this trend. We did however see an improvement in profitability in BUK [Barclays UK], and a good underlying return from our Consumer, Cards and Payments business, which partially offset the under-performance in Markets.”