• Calm waters in the markets hurt trading revenues at Barclays in Q3.
  • The third quarter was clearly a difficult one for our Markets business," CEO Jes Staley said.
  • Shares plunge nearly 8% to see their biggest single day loss since June 24, 2016.
LONDON — Shares in banking giant Barclays had their worst trading session since the day after Britain voted to leave the EU last summer after a disappointing set of Q3 results for the lender dropped on Thursday morning.
On the surface, things looked reasonably good as profits jumped by 19% before tax compared to the same period in 2016, which the bank put down to "lower litigation and conduct and Non-Core costs." Profits were £3.448 billion in the quarter.
However, elsewhere, things were not so peachy, with Mike van Dulken, head of research at Accendo Markets noting that: "Total income and net operating income were not quite as high as consensus had hoped, with bond, FX and commodity trading down 34% amid muted volatility."
Essentially, global markets are too quiet for Barclays' markets business, which the bank said on Thursday was hit "hard" during the third quarter of 2017.
Beyond the headline number, however, and Barclays' markets business didn't have much fun in the quarter, with the lack of volatility to blame. 
In the words of the bank:
"Markets income decreased 14% to £3,535m reflecting a 27% reduction in Macro income to £1,314m, due to lower market volatility and the impact of exiting energy-related commodities, as well as an 8% reduction in Equities income to £1,267m driven by lower equity derivatives revenue, partially offset by improved performance in cash equities and equity financing.
"The third quarter was clearly a difficult one for our Markets business within BI. A lack of volume and volatility in FICC hit Markets revenues hard across the industry, and we were no exception to this trend," Chief Executive Jes Staley said in a statement alongside the results announcement, reinforcing the numbers.
All that led to a scenario where investors decided to sell out of the bank's stock aggressively on the day, as the chart below shows:
Screen Shot 2017 10 26 at 16.21.26Markets Insider
Despite the lackluster results, CEO Staley was broadly positive about the state of the bank in his statement, saying:  "The third quarter of 2017 was particularly significant for Barclays as it was the first for many years in which we have not been in some state of restructuring.
"Having closed the Non-Core unit, and sold our controlling interest in Barclays Africa in June, we now have the end state Transatlantic Consumer and Wholesale Bank - in Barclays UK and Barclays International - which we set out to build in March of 2016."

By no means is Barclays alone as a big bank struggling to make money in its markets business in the current climate, with Deutsche Bank flagging similar problems in its results, which were also released on Thursday morning.
 "The revenue environment remained challenging," Deutsche Bank CEO John Cryan said in a statement.

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