Barclays cashes in as bank crisis boosts deposits

BARClAyS benefited from a £10bn 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 16pc to £2.6bn, the highest level in 12 years.

Shares rose 5.3pc, or 8.18p, to 162.04p as the results suggested Barclays has emerged relatively unscathed from turmoil which shook the sector last month. 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 £55bn customer exodus in the quarter while troubled US lender First Republic endured a £58bn 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 £10bn to £556bn, mainly from business clients. In the UK, income from personal banking climbed 23pc to £1.3bn, 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 9pc to £1bn but it said it will axe 800 jobs.