(Bloomberg) -- Barclays Plc is on track to meet its earnings targets for the year, helped by customers making the best of higher prices and interest rates, according to Chief Executive Officer C.S. Venkatakrishnan.
The bank, which wants to return at least £10 billion ($13.4 billion) to shareholders in the next few years, feels “comfortable” reaching its return on tangible equity target of more than 10% this year, Venkatakrishnan said at a Bank of America conference in London.
The CEO said defaults on consumer credit remained muted, although the loan-loss rate in its UK business is likely to increase given it was only a single basis point at the end of the second quarter. “There’s only way that goes from there,” Venkatakrishnan added.
The UK economy is growing modestly as the government warns of painful tax decisions to address a budget shortfall. Venkatakrishnan said the mood music of the new Labour administration was business-friendly and he anticipates more support for housing at an investment summit next month.
“Inflation is slowly coming under control; obviously the stock of prices is higher than it was a few years ago” but unemployment trends are positive, Venkatakrishan added.
With major banking deals back on the agenda in Europe, he said Barclays was only interested in acquisitions that add to its capability and scale, as it’s done with Tesco Bank and Kensington Mortgages in the past couple of years.
Barclays would consider deals “of a size that is manageable, both from capital use and also as a management matter,” Venkatakrishan added.
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