Barclays' Second-Quarter Results Driven by Investment Bank Performance Normalising

No-moat Barclays reported secondquarter profit before tax of GBP 2,580 million, up 8% versus the first quarter this year. This performance was, however, masked by a substantial loan loss reversal of GBP 797 million booked in the second quarter. On a pre-provision profit before tax basis, which we think is a better comparison as the credit impairment line remains volatile, results dropped 38%. The culprit of this seemingly weak performance can be found in fixed income, currencies and commodities, equities and corporate lending within its investment bank. These had performed exceptionally well over the last year and made up for weaknesses in Barclays' retail business as a result of the pandemic. As such, we don’t think this performance is cause for concern. In its U.K. business, Barclays showed some good developments on both mortgage volumes as well as margins, although unsecured balances are still posing a drag. We maintain our GBX 185 per share fair value estimate.