Barclays profit lifted 27% to £1.8bn in the first three months of the year, but added that its mortgage business was lower due to “margin compression”.  

The high street bank says gross mortgage lending in the first quarter was down 1.4% at £6.8bn, from £6.9bn a year ago.  

Its attributable profit rose due to a higher net interest margin – the difference between what it pays out to savers and what it charges to lenders – which in the UK division lifted to 3.18% from 2.62% last year, despite “mortgage margin compression and lower interest-earning lending in UK cards.”  

Sales at its Barclaycard Consumer UK division were down 11% to £247m.  

However, the business adds that its loans increased £3.1bn on the previous quarter, “primarily reflecting the acquisition of Kensington Mortgage Company”.  

The bank completed the acquisition of the specialist mortgage lender on 1 March, which includes a £2.2bn portfolio of mortgages.  

Revenue across the bank’s UK and international business rose 11 per cent to £7.2bn, beating estimates of £6.8bn. 

Barclays group chief executive C. S. Venkatakrishnan says: “This is a strong first quarter with group income up 11% to £7.2bn and profit before tax up 16% to £2.6bn, generating a group return on tangible equity of 15% and earnings per share of 11.3p.   

“All three businesses have performed well with high-quality income growth and double-digit returns.   

“The momentum across the group allows us to maintain a robust capital position, deliver attractive returns to shareholders, and support our customers and clients through an uncertain economic environment.”