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Shareholders returns of 10 billion over next 3 years. Nice.
Profits a little lower than forecast which may act as a drag on share price. We will get more details of restructuring today.
The bank reported a pretax profit of £6.6 billion, down from £7 billion the year before.
Barclays said it would return a total of £3 billion to shareholders for 2023 - up 37% on the previous year - including a fresh share buyback of £1 billion and a 5.3 pence per share final dividend.
Hello Kitty says Hodl.
G-Y Bears fcked today.
Performance Highlights
In 2023 Barclays delivered a return on tangible equity (RoTE) of 10.6% excluding Q423 structural cost actions1, with total capital distributions of £3.0bn2, equivalent to c.19.4p per share
C. S. Venkatakrishnan, Group Chief Executive, commented
"In 2023 Barclays delivered solid performance against a mixed macroeconomic backdrop, meeting its financial targets. Our strong 13.8% Common Equity Tier 1 (CET1) ratio enables us to deliver increased total capital distributions of £3.0bn to shareholders, up c.37% on 2022, which includes a further share buyback of £1.0bn. Our new three-year plan, which we will be announcing at the Investor Update today, is designed to further improve Barclays' operational and financial performance, driving higher returns, and predictable, attractive shareholder distributions"
•Group FY23 RoTE of 10.6% and earnings per share (EPS) of 32.4p, excluding £0.9bn of Q423 structural cost actions
•Total capital distributions of £3.0bn announced in relation to 2023, up c.37% on 2022, reflecting a total dividend of 8.0p and total share buybacks of £1.75bn for 2023. This includes our intention to initiate a further share buyback of up to £1.0bn
•Group net interest income (NII) of £12.7bn, up 20% year-on-year, with Barclays UK NII of £6.4bn, up 9% year-on-year, delivering a Barclays UK net interest margin (NIM) of 3.13%
•Group cost: income ratio of 63% excluding Q423 structural cost actions
•Group FY23 loan loss rate (LLR) of 46bps
•CET1 ratio of 13.8% and tangible net asset value (TNAV) per share of 331p
Please do your own research as always and always follow the FCA guidelines.
Average results today - sp might trickle up because sp is rock bottom. Dont rate ceo.
Expect this to drop like it always does when results are released, so typical of Barc
After all these years
Boonie you are still my favorite poster :-)
Part 2
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https://www.ft.com/content/e4691d46-439e-4417-a576-405f09a14776
Even though BGI was cash generative and used little capital, there was a modest improvement in Barclays’ capital ratios and regulators were delighted. But investors disagreed, worried that the sale left Barclays over dependent on the investment bank.
Barclays had sold its crown jewels and to make matters worse, in 2012, again in part to meet regulators’ new capital rules, the bank sold its BlackRock stake, also for £4bn.
Over the ensuing years, on the back of its new status as a broadly-based fund manager, BlackRock’s shares soared while Barclays, hampered by a perceived over-dependence on investment banking, flatlined. The arithmetic of this divergence is stark. BlackRock’s current market value is $118bn and Barclays’ interest in BGI would therefore have been worth $24bn if it still owned it. This is only slightly less than Barclays’ total market value of $28bn.
These decisions, though taken under extreme circumstances, were strategically questionable and commercially disastrous. They leave Barclays in its current dilemma, over dependent on capital-intensive investment banking, short of stable, cash-producing businesses and with the shares sitting at less than half of book value.
What would shareholders give to reverse these decisions? That is one question that can’t be answered next week, but “be careful what you wish for” is a message that board and regulators can take away from the events that led Barclays to its current predicament.
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https://www.ft.com/content/e4691d46-439e-4417-a576-405f09a14776
On February 20, Barclays’ chief executive C S Venkatakrishnan will be revealing the outcome of a strategic review. Such reviews are a rite of passage for Barclays CEOs. History provides the reasons for such self-examination, as well as clues for today’s management and regulators.
As has become usual for Barclays’ shareholders, the issue is an underperforming share price. This is generally blamed on Barclays’ investment bank arm, which absorbs a majority of risk-weighted assets, produces lower returns than the rest of the business and appears accident prone. Investors don’t like it.
Although the investment bank dates back to 1985, the current strategic bind stems from the great financial crisis. In September 2008, Barclays agreed to buy Lehman’s US equities and corporate finance business out of Chapter 11, completing the quarter-century-long dream of a seat at Wall Street’s top table. Staying there would be a stretch but with Bob Diamond running the investment bank, the anchor of a robust consumer bank and the backing of an ambitious board, investors briefly shed their doubts.
Not so the authorities. The following month, the British government was desperately shoring up the country’s banks through an infusion of state capital. Mistrustful of Barclays’ balance sheet and risk management capabilities, the government pressed it to join Lloyds and RBS in state ownership. That would have killed the investment banking strategy just when the board thought they had it fixed, so they refused.
The Bank of England and its regulatory arm, the Financial Services Authority, were furious. Sceptical of Barclays’ ability to survive, the FSA told Barclays it had until June 2009 to find £12bn to stay out of state hands and that this would have to include the sale of a business.
There was only one big, detachable sale candidate: Barclays’ investment management business, BGI. This once obscure corner of Barclays had been carefully nurtured into one of the world’s biggest fund managers, with over £1tn under management.
During the autumn and winter of 2008-9, Barclays inched its way towards the £12bn capital target, raising money from the Middle East, suspending the dividend and shedding risk-weighted assets. But the regulators pressed it to do more and in June 2009, Barclays agreed to sell BGI for £4bn cash and a 20 per cent interest in the acquirer, BlackRock.
UK’s biggest banks set to report record annual profits
Barclays, HSBC, Lloyds and Standard Chartered will report their financial results for 2023.
The UK’s biggest banks are set to report record-high profits after a year that saw lenders benefit from higher borrowing costs, as they face questions over the outlook for the year ahead.
Barclays, HSBC, Lloyds and Standard Chartered will report their financial results for 2023, on Tuesday, Wednesday, Thursday and Friday respectively.
On Friday, NatWest revealed its biggest yearly profit since 2007, before the global financial crisis, and a fifth higher than the previous year.
The outlook for 2024 may end up being more important than the results themselves
Matt Britzman, equity analyst for Hargreaves Lansdown
The five banks are forecast to make combined pre-tax profits of more than £50 billion, which would be a record-high amount and ahead of the pre-financial crisis peak in 2007.
HSBC is forecast to report a profit of 34 billion US dollars (£27 billion) and analysts are expecting Lloyds to have made £7.4 billion last year, which would top previous record earnings for the groups.
Barclays is estimated to report a £6.7 billion pre-tax profit, lower than highs earned in 2021.
It is also due to update shareholders on its much-anticipated strategy for reducing costs, which is set to involve restructuring.
It comes after NatWest said it was focusing on managing business costs and making the group more efficient amid a tougher climate for the UK economy – which fell into a technical recession at the end of last year, according to official figures.
But bumper profits over 2023 were driven by banks making more money from more expensive loans and mortgages, compared with what they paid out to savers, as the Bank of England raised UK interest rates.
This difference is known as a net interest margin (NIM).
But with the banks having come under more pressure to reward savers, and as interest rates are expected to be reduced this year, the measure could be in sharp focus.
“The outlook for 2024 may end up being more important than the results themselves”, suggested Matt Britzman, an equity analyst for Hargreaves Lansdown, as the “tides look to be turning” for the banking giants after a bumper year.
“As a traditional lender with operations geared toward interest income, net interest margin is key”, he said of Lloyds Banking Group.
“With consumers under pressure, loan default commentary and the value of impairments Lloyds takes will be watched closely.”
He added that the size and scale of restructuring efforts at Barclays will be “the biggest question mark overhanging” the bank.
While investors will be looking for reassurances from HSBC that the global bank has not been impacted by volatility in China’s property market.
Use a web scanner to find the article, copy and paste the link into this url https://12ft.io/
that's why lloyds is also **** price...
BARC on the acquisition trail?
https://uk.finance.yahoo.com/news/barclays-eyes-socgens-uk-private-075913184.html
Ok
Lloyd’s also forget to distribute the dividends they held back due to covid
If they decide to allocate only Gbp 1bn (up from 750mn?). That would leave Gbp 2bn for dividends (13p including a Special, perhaps) which brings the yied to a MUCH more interesting 9%.
Anyway, let's wait and see and hope the news is good.
Boonie Times are strict on copyright so best to do the one month free trial and remember to cancel.
Qantas, the times article not opening, unless you subscribe . Are you able to copy and paste. Thanks
I did a quick 'back of the envelope' calculation.
Gbp 9 billion is 40 percent of the current market cap. Dividing by 3 years gives an average of 13 percent, or 20p per annum.
Assuming that is split 50/50 between dividends and share buybacks (5 percent of market cap), that gives a 10p dividend (6.75 percent).
Not a massive jump from the current yield. And factored in already by the teenage scribblers.
Don't book that cruise yet.
Posting the article would be useful
Wow shorts G-Y Bears so doomed to failure and desperate
Hello Kitty says Hodl.
Barclays 9 billion reward for investors.
Https://www.thetimes.co.uk/article/barclays-eyes-9bn-reward-for-investors-lbk7v7g7m
Please do your own research as always and always follow FCA guidelines
Barclays problems amongst many, if they wanted U-turn and be forgiven, how could they expect shareholders to be on board especially when they also conveniently forgot dividends from 2020 and 2021. The covid proved to be aren't that bad unlike the financial crisis yet, profit accrued were not distributed out.
If they really respected shareholders, they'd have declared special dividends and such to improve their public relations. At the moment, dividend is bad, has regulators telling them if they could or not distribute profits and stuff, who'd want to support the management? Their public relations is closed to 0.
Cont
The former Barclays boss is challenging the Financial Conduct Authority, after it ruled that he had misled the regulator over his relationship with the disgraced financier. The FCA has since banned Staley from holding any senior role in the City. Neither Staley nor Barclays have commented on the report.
UK bank announcements will continue on Wednesday, with analysts expecting HSBC to double its annual pre-tax profits, to $34bn (£27bn) from $17.5bn in 2022.
The London-headquartered lender will have benefited from rising interest rates in Asia – where it makes the bulk of its profits – and the west.
This is likely to result in another significant payout for chief executive Noel Quinn, who was handed a $5.5m package in 2022, including a $2.2m bonus.
Barclays chief executive CS Venkatakrishnan has a tough act to follow. Just days after rival NatWest revealed its biggest profit since the onset of the financial crisis in 2007, the Barclays boss will be delivering much less cheering news: cost cuts, job losses and restructuring plans are all expected to feature in the bank’s first major strategy update in a decade.
Tuesday’s results will also be a lesson in salesmanship: how to promise better times after reporting yet another slip in annual profits.
Analysts are expecting the chief executive – who is known to colleagues as “Venkat” – to reveal a 4.5% fall in pre-tax profits, to £6.7bn. Although UK lenders have benefited from higher charges on loans and mortgages – thanks to the fastest rise in interest rates since the 1970s – at Barclays those earnings will partly be offset by restructuring costs, which are expected to result in a charge of between £700m and £1bn.
Figures from Barclays’s investment bank is also likely to be a drag on profits, following another sluggish year for deals and public listings. The downturn has already taken a toll on US rivals such as Goldman Sachs and Morgan Stanley, both of which reported their lowest annual profit in four years in January.
But that division’s poor performance could serve to show Venkat is on the right track. He wants to scale down the volatile investment bank side, and lean more heavily on income from wealth management and retail banking (this paved the way for Barclays’s £700m buyout of Tesco’s banking business this month).
The rub here is that he is asking shareholders to join him on what is in effect a U-turn. Venkat’s predecessor Jes Staley, now mired in controversy, spent years resisting pressure from an activist investor who also wanted to see a much smaller, if not entirely offloaded, investment bank.
“Barclays fought off calls from Edward Bramson of Sherborne Investors to spin off the unit, and rebutted suggestions that it did not earn a consistently high enough return on equity to justify the amount of group capital allocated to it,” said analysts at AJ Bell. “A bumper first quarter in 2023 helped to support Barclays’s strategy but the investment bank’s performance has ebbed since.”
The questions now are about the scale and costs of the restructuring plans. Though the costs could eat into bankers’ bonus pools, they are unlikely to have a large impact on dividends. Venkat is expected to soften the blow of another drop in profits with a dividend payout that AJ Bell expects could reach 9.5p a share, up from 7.25p in 2022.
At the very least, it will help distract from more controversial matters, including a recent report by Bloomberg which alleges that Staley stayed in touch with Jeffrey Epstein for years after taking over as Barclays chief executive – despite claims that he cut ties with the convicted sex offender in 2015.
Cont