Barclays Q3 profit rises 12% YoY, lender announces £500 million share buyback

Barclays announces a £500 million buyback.

The British lender's pretax profit for the July-September quarter increased to £2.3 billion from £2.1 billion a year earlier, broadly in line with analysts' average forecast of £2.4 billion.

The results mark the start of the earnings season for major European banks, with investors also watching the potential impact of Britain's upcoming budget on the financial sector. Finance Minister John Healey is due to present his first budget on October 28, with further taxes on banks among the measures that could affect lenders.

Barclays' investment bank generated total income of £3.1 billion during the quarter, below analysts' expectations of £3.3 billion.

Results from major US investment banks earlier this month highlighted uneven trading conditions across financial markets, as slower dealmaking and weaker fixed-income performance weighed on revenues. Equities trading remained a relative bright spot, sustaining the momentum seen during the first half of the year.

Barclays' equities trading revenue rose 47% in the third quarter, outperforming the average 37% increase reported by the five largest US investment banks, based on a Reuters calculation using company statements.

However, the bank's fixed-income trading income fell 19%, significantly underperforming its US peers, which recorded an average decline of 5%.

The contrasting performance of its trading divisions highlights the challenges facing investment banks as market conditions shift, even as stronger equities trading and cost discipline support overall profitability.

Investors will now assess whether Barclays can sustain its earnings momentum amid changing market conditions and the possibility of additional taxation on Britain's banking sector.