Barclays ( NYSE: BCS ) stock tumbled 9.4% in Wednesday premarket trading in the U.S. and 8.1% in London afternoon trading after the U.K.-based bank's Q4 profit before tax of £1.31B ($1.57B) fell 8% Y/Y due to a £498M credit impairment vs. a £31M benefit in the year-ago period.
"The deteriorating macroeconomic forecast resulted in an increased charge, partially offset by utilizing economic uncertainty PMAs (post-model adjustments)," the company said.
Based on the current macroeconomic outlook, Barclays ( BCS ) expects a loan loss ratio of 50-60 basis points in 2023, vs. 30bps reported in 2022.
Before the impairment, Q4 profit before tax increased 29% Y/Y to £1.81B.
Q4 net interest income of £2.74B increased from £2.23B in the year-ago period, the company reported.
Return on average tangible shareholders' equity slipped to 8.9% in Q4 2022 vs. 9.0% in Q4 2021.
Q4 operating costs of £3.75B increased from £3.51B in Q4 2021.
Loans and advances at amortized cost were £398.8B at Dec. 31, 2022 down from £413.7B at Sept. 30.
Deposits at amortized cost were £545.8B at the end of Q4 compared with £574.4B at the end of Q3.
Earlier, Barclays GAAP EPS of 6.50p, total income of £5.8B; initiates FY23 guidance .
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Barclays stock slides after Q4 profit falls on impairment; braces for higher loan losses