The group increased adjusted pre-tax profit by 16 per cent to £1.8bn for the three months to September.
However, once litigation and conduct costs are also included in the figure, the pre-tax haul for the period was just £246 million, down from £1.46bn in the same period last year.
The bank performed ahead of analysts’ forecasts despite being dented by the provision for mis-selling PPI on loans and credit cards. Shares were up marginally in early trading.
Its results came a day after Royal Bank of Scotland swung to a modest pre-tax operating loss after taking a £900m hit for PPI claims.
An estimated 64 million PPI policies were sold in the UK, many in the 1990s and early 2000s. They were intended to cover missed debt repayments and were frequently marketed to consumers using aggressive tactics.
Barclays had previously announced that it expected to be hit by between £1.2bn and £1.6bn in costs related to PPI. It also hailed a stronger-than-expected performance by its under-pressure investing banking arm.
In recent months, the group has faced pressure from activist investor Edward Bramson to scale back its investment banking operations amid challenging trading conditions.
Pre-tax profit from the investment arm leapt 67 per cent to £886m for the period, as income in the division rose 17 per cent to £2.6bn.
Group income increased by 8 per cent year-on-year to £5.5bn as it was buoyed by the investment division.
Despite beating expectations, the banking behemoth warned that “the outlook for next year is unquestionably more challenging now than it appeared a year ago” due to uncertainty in the economy.
Group chief executive Jes Staley told investors: “These represent another set of consistent and resilient results, and they show the benefits of our diversified model – one which allows us to weather today’s macro headwinds, and grow our businesses and profitability over time.
“As we continue to invest in our digital capabilities across the bank, management’s focus on cost control remains a priority.
“These results show we remain on track to achieve our target of a group return of greater than 9 per cent for 2019.”
Richard Hunter, head of markets at Interactive Investor, said: “For the most part, Barclays remains on track in delivering its ambitious and complicated transformation.
“The PPI provision is of course unwelcome, but is nonetheless in the middle of the range which Barclays had previously guided.”
John Moore, senior investment manager at Brewin Dolphin, said: "Like many of its peers, Barclays has endured a more volatile 2019 than it would have liked – the bank’s share price is up around 10 per cent now, but spent most of the earlier part of the year in negative territory.
"Following on from RBS’s results yesterday, PPI provision has hit Barclays UK’s profitability as the deadline for compensation came and went – this one-off hit has still to be finalised.
"Nevertheless, at a core level this is a relatively robust set of numbers from Barclays against a tough economic backdrop: return on equity is strong – although down on last year – while cost discipline remains on track. There is still work to be done, but Barclays looks in decent shape."