Decent Q3 at Barclays With All Segments Contributing Positively

Barclays reported third-quarter operating profits before tax of GBP 1,969 million versus a GBP 1,808 million consensus estimate collected by the group itself prior to the release. A GBP 339 million reversal on litigation and conduct charges drove the outperformance. On an underlying basis, performance was decent, nonetheless. Total income grew 9% to GBP 5,951 million versus the same period a year ago on good performances in the U.K. and the cards and payments businesses offsetting the slowing but still well performing corporate and investment bank. The cost-to-income ratio, excluding litigation and conduct charges, worsened to 66% from 63% a year ago on higher operating expenses (up 14%). Inflation, investment spending, and the weakening British pound versus the U.S. dollar were the culprits of the higher operating expense outcome. We maintain our GBX 208 per share fair value estimate and no-moat rating.