Barclays PLC profits rebound to £2.4bn despite Barclaycard slump

() said credit card income dropped by more than a fifth in its latest quarter as people cut back on their use of Barclaycard during the lockdown.

Profits for the high street major still rose by 167% to £2.4bn in the three months to end-March 2021 as smaller bad debt charges countered the impact of the reduced card revenue and lower interest rates.

Impairment charges dropped to £100mln from £2.1bn a year ago, which helped to offset a 5% drop in income to £5.9bn.

All divisions saw their income fall with international down by 5% and corporate and investment banking by 1% but credit cards tumbled 22% to £0.8bn due to lower balances and less activity, said the FTSE100 bank.

UK bank retail bank income also dropped 8% to £1.6bn in spite of a record quarter for lending, which was driven by mortgage demand said Barclays. The loan book rose by £3.6bn to £151.9bn.

Expenses rose by 10% to £3.6bn as bonuses increased due to buoyant financial market activity and deals.

Going forward, Barclays said it expects its bad charge for the year to be materially below 2020 and if conditions continue to improve it will reduce its provisions level.

Income headwinds, however, are also expected to persist it said with credit card and unsecured lending likely to remain subdued and margins under pressure from low interest rates.

“While evidence of recovery is encouraging, we have continued to take a cautious view of the impact of the pandemic on the business,” said chief executive Jes Staley.

Barclays added it will review the level of dividends it will pay as the year progresses.

For this quarter, it said it had accrued for a 0.75p dividend based on a 3p payment for the year, but said this should not be taken as a forecast.