Shares in Barclays Plc on the London Stock Exchange dropped by 6% on Thursday morning after the UK lender decided to cut its guidance for net interest margin at its retail bank. This move suggests that the bank believes that its boost from rising interest rates is nearing its end.
Compared to a year ago, Barclays’ total income rose by 14%. Still, the bank insisted that macroeconomic developments such as the expected ending of the Bank of England’s fiscal tightening policy convinced it to reduce its net interest margin outlook from 3.2% to 3.15%.
Barclays’ trading revenue plunged by 41% to £1.75 billion ($2.3 billion) compared to a year ago, falling short of expectations. The bank’s fixed-income trading division declined by 22% to £1.2 billion while equities trading revenue plummeted by 60% to £563 million.
The UK lender announced plans to buy back a further £750 million of stock, beating expectations as it follows up from its £500 million buyback program that occurred in April.