LONDON – November 5, 2020: Fog shrouds the Canary Wharf business district, including global financial institutions Citigroup Inc., State Street Corp., Barclays Plc, HSBC Holdings Plc and the No. 1 commercial office building. 1 Canada Square.
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LONDON – Barclays reported a fourth-quarter net loss of 111 million pounds ($139.8 million) on Tuesday, as the British lender announced a major strategic overhaul and boosted its shares by more than 6% in early trading.
Analysts polled by Reuters had expected net profit attributable to shareholders of £60.95 million for the quarter, according to LSEG data, as Barclays embarks on a major restructuring program to reverse falling profits.
For the full year, attributable net profit was 4.27 billion pounds, down from 5.023 billion pounds in 2022 and below the consensus forecast of 4.59 billion pounds.
The bank also announced a further share buyback worth 1 billion pounds and would present a new three-year plan aimed at further improving operational and financial performance, CEO CS Venkatakrishnan said in a statement.
Barclays suffered a loss of £900m in the fourth quarter due to structural cost-cutting measures, which are expected to result in gross cost savings of around £500m this year, with an expected payback period of less than two years.
Here are some other highlights:
- Group sales were £5.6 billion in the fourth quarter, down 3% on the same period last year.
- Loan impairments totaled £552 million, up from £498 million in the fourth quarter of 2022.
- The common equity Tier 1 capital ratio (CET1), a measure of the bank’s financial strength, was 13.8%, down from 14% in the previous quarter.
- Full year return on tangible equity (RoTE) was 10.6%, excluding restructuring costs in the fourth quarter. RoTE was 5.1% in the fourth quarter, compared to 8.9% in the fourth quarter of 2022.
- Quarterly total operating costs were roughly flat year-on-year at £4 billion.
Momentum at Barclays’ traditionally strong corporate and investment bank (CIB) – particularly its fixed income, foreign exchange and commodities trading division – slowed in 2023 as market volatility eased.
On Tuesday, the bank announced a major operational overhaul that included significant cost cuts, asset sales and a reorganization of its businesses, while pledging to return £10 billion to shareholders through dividends and share buybacks between 2024 and 2026.
The business will now be divided into five operating divisions, separating the corporate and investment banks, forming: Barclays UK, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank and Barclays US Consumer Bank.
“This re-segmentation will enable improved and more detailed disclosure of the performance of each of these operating divisions, along with greater accountability from an operational and management perspective,” the bank said in its report.
Barclays is targeting total gross cost savings of £2 billion and a RoTE of more than 12% by 2026.
This is a breaking news story and will be updated shortly.
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2024-02-20 08:10:46
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