Barclays UK Q1 23 results

Barclays, like other high street lenders, is benefiting from increased margins and profitability, thanks to the return of interest rates to near-normal levels. However, credit impairment charges have more than doubled, albeit from a low base, and further hits to their bottom line this year are likely, as the cost of living crisis and higher mortgages and rent creates havoc with people's finances.

Banks always benefit from higher interest rates and this is coming through in the Q1 results. The Barclays results also show that mortgage books are holding up as expected due to unemployment levels remaining low. It also shows the benefits of the stress testing regime regarding the ability of borrowers to face increased interest rates. Though many borrowers are still on fixed rates, the stress tested breathing room has allowed them to weather increased living costs while still paying their mortgages. It will be interesting to see if this resilience continues later in the year as more and more people remortgage at higher rates.