Sure, Barclay's is a player in this banking game, but the new entrants will have much lower costs, operating on much tighter margins, My guess (and it is only a guess based on an ambiguous analogy with what's happening in grocery) is that the legacy banks margins will get squeezed. They will have to trim risk and go back to being the good old trading and saving institutions of old. This is perhaps a steady income but not a growth model that we were so accustomed to seeing before the crash. From my reading of things, government and regulators know that habit and attitudes will not change, (among the banks current employees - the moves and shakers) so the environment has to change. Globalization will shift into a different gear. On that basis, do expand your portfolio to reflect this, and not dwell so much on one institution. Good luck.
just read from reuters Britain's financial regulator has intensified talks with six major banks over allegations of collusion and manipulation in the foreign exchange market, setting the stage for a group settlement that could cost them close to 2 billion pounds. The FCA met officials from UBS (UBSN.VX), Barclays (BARC.L), HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), JP Morgan (JPM.N) and Citi (C.N) this week and discussed the possibility of a group settlement that would see the banks fined different amounts depending on the gravity of the alleged misconduct, sources said.
The aggregate fine could come in at around 1.8 billion pounds with the maximum fine for one bank put forward of between 300 million and 400 million pounds and others pegged below 300 million, one source familiar with the matter said.
I have not looked in here for a while. I see the share price continues to stagnate. I can appreciate among some here the incredulity of a dog like, say, Lloyds bank, holding its own, and HSBC with all the attendant Asia risk propping up nicely, and yet Barclays seems adrift. Some guess it's all about 'flavour of the month'; some infer a ploy or shenanigans at play by market makers deliberately depressing the stock; while other see patterns as part of a sector reallocation with ETFs and the like. What is my view (I am not invested here, but like to observe and learn, and its easy enough for me to speculate, and that's all I am doing) I think it is more systemic. Banking is in general retreat due to new regulation, reserve ratio requirement, and the atrophying over time of their most profitable (speculative) operations. Those guys at the banks accustomed to outsized bonuses gambling with other peoples' money are migrating to hedge funds etc.; I think what we see with Barclay's is but the vanguard for the banking sector in general. There are new nifty tech entrants about to enter retail banking and what is happening to the (previously complacent) grocers like Tesco, Sainsbury, Morrisons etc with an overcrowded space and increasing differentiation, will and is coming to banking. If I was to make a bet, I would say that Alibaba, Ebay, Amazon, Apple etc plus a thousand other ebanks will flood the sector and force change. The legacy players have had it all their own way for decades, and flourished with globalisation. Now is the time of others. The only certainty is change, as Heraclitus articulated millennia ago. Long live the Greeks!
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