(Alliance News) - Barclays PLC on Tuesday announced an efficiency drive, a new divisional reporting line-up and a plan to return GBP10 billion to shareholders over the next three years.
Shares were 6.6% higher at 158.84 pence each in London in early trade.
The lender, looking to win over doubters in a strategy update later on Tuesday, also announced a sharp slump in final quarter profit, as restructuring costs weighed on the bottom line.
London-based Barclays said it rounded off 2023 with a 3.5% decline in fourth-quarter total income to GBP5.60 billion from GBP5.80 billion a year prior.
Pretax profit for the final quarter plunged 92% to GBP110 million from GBP1.31 billion. It booked a GBP927 million fourth-quarter hit from restructuring efforts, numbers showed.
For the whole of 2023, total income rose 1.7% to GBP25.38 billion from GBP24.96 billion in 2022. Pretax profit fell 6.5% to GBP6.56 billion from GBP7.01 billion.
Total income fell short of the GBP25.54 billion prediction by company-compiled consensus, while the profit was lower than the GBP6.69 billion that was forecast.
Net interest income alone shot up 15% on-year in the final quarter, and 19% for the whole year.
Its fourth-quarter net interest margin, however, faded to 3.83% from 3.97% a year prior. For the whole of 2023, the NIM climbed to 3.98% from 3.54%.
Barclays upped its final dividend by 6.0% to 5.3 pence per share from 5.0p. Its total dividend for 2023 amounted to 8.0p, a rise of 10% from 7.25p.
In addition, the lender announced a new GBP1.0 billion share buyback programme.
Looking ahead, it plans to return GBP10 billion to investors through dividends and share repurchases, "with a continued preference for buybacks", over 2024 to 2026.
It added that it plans to maintain its dividend at the 2023 level "in absolute terms", but added this will be "progressive dividend per share growth" when accounting for a share count reduction as a result of increased share buybacks.
It is targetting a group net interest income, excluding the Barclays Investment Bank and the firm's head office function, of GBP10.7 billion in 2024.
It is eyeing a return on tangible equity of "greater than 10%" in 2024, compared to 2023's 9.0%, which was down from 10.4% in 2022. The firm predicts an increase to above 12% in 2026.
Barclays is also planning to trim costs.
"This includes GBP1 billion of gross efficiency savings in 2024 and total gross efficiency savings of GBP2 billion by 2026," it added.
The results came ahead of a strategy update by the bank. There is pressure on Chief Executive CS Venkatakrishnan, who received cancer treatment last year, to deliver and support a Barclays share price which comes into the release on the back foot.
Shares in the bank have fallen around 10% over the past 12 months. Shares are down roughly 20% since Venkatakrishnan took on the role in November 2021.
Ahead of the strategy day, Barclays set out plans to re-jig its reporting divisions.
The divisions include Barclays UK, its ring-fenced UK retail banking division, and the business-focused Barclays UK Corporate Bank. The units also include Barclays Private Bank & Wealth Management, Barclays Investment Bank and Barclays US Consumer Bank.
"Barclays Private Bank & Wealth Management comprises our UK wealth offering, offering a range of financial services, including Smart Investor, our digital investing service. Our Private Bank is centred in the primary global wealth hubs, providing clients with a range of investing, banking and lending products alongside expert advice," Barclays explained.
Vim Maru leads Barclays UK and Matt Hammerstein the UK Corporate Bank. Sasha Wiggins takes charge of Barclays Private Bank & Wealth Management, while Denny Nealon continues in his role as CEO of the US consumer offering.
The investment bank will be co-led by four people. Adeel Khan is the sole head of Global Markets, while Cathal Deasy and Taylor Wright will continue in their current roles as co-heads of Banking. Stephen Dainton will lead Barclays Bank PLC and be the head of Investment Bank Management.
By Eric Cunha, Alliance News news editor
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