Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
One stock that might be an intriguing choice for investors right now is Barclays PLC BCS. This is because this security in the Banks - Foreign space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Banks - Foreign space as it currently has a Zacks Industry Rank of 56 out of more than 250 industries, suggesting it is well-positioned from this perspective, especially when compared to other segments out there.
Meanwhile, Barclays is actually looking pretty good on its own too. The firm has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and long term.
Barclays PLC price-consensus-chart | Barclays PLC Quote
In fact, over the past month, current quarter estimates have risen from 49 cents per share to 54 cents per share, while current year estimates have risen from $1.60 per share to $1.62 per share. The company currently carries a Zacks Rank #3 (Hold), which is also a favorable signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So, if you are looking for a decent pick in a strong industry, consider Barclays. Not only is its industry currently in the top third, but it is seeing solid estimate revisions as of late, suggesting it could be a very interesting choice for investors seeking a name in this great industry segment.
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Barclays (BCS), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Barclays currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if BCS is a promising momentum pick, let's examine some Momentum Style elements to see if this financial holding company holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For BCS, shares are up 1.9% over the past week while the Zacks Banks - Foreign industry is up 0.13% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 10.64% compares favorably with the industry's 4.44% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Barclays have increased 18.63% over the past quarter, and have gained 40.75% in the last year. In comparison, the S&P 500 has only moved 10.82% and 32.56%, respectively.
Investors should also take note of BCS's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, BCS is averaging 15,577,282 shares for the last 20 days.
Earnings Outlook
Vim Maru is the new CEO of Barclays UK, while Matt Hammerstein, the previous holder of that role, is now leading the UK corporate bank. Sasha Wiggins is leading the private bank and wealth management division.
Loan Growth
The bank also said last month that it sees risk-weighted assets climbing by £50 billion in the coming years. The company is planning to allocate £30 billion of that to its UK-focused businesses, which include a consumer bank, a corporate bank and a private bank and wealth management division. The remaining £20 billion will be allocated to the US consumer bank.
Part of that is tied to the company’s confidence in the health of the UK and US economies even as the company has seen delinquencies among its consumer customers tick up slightly in recent months, Venkatakrishnan said on Monday.
“The economy is stabilizing, it looks like on both sides of the Atlantic you’re having a softish landing,” he said. “Generally, we are constructive towards lending.”
Bloomberg) -- Barclays Plc is seeking to expand its relationships with sovereign wealth funds and private equity giants as part of its efforts to improve the profitability of its investment banking division by expanding in advisory and equity underwriting.
Those firms — which are sitting on trillions of dollars of dry powder for deals — are the kind of key clients Barclays is hoping to secure as it looks to move beyond the debt underwriting for large, multinational corporations that it’s long been known for, Chief Executive Officer C.S. Venkatakrishnan said in an interview with Bloomberg Television. The bank already has the talent it needs to accomplish that shift, he said.
“We still work with corporations in a very big way, but, in addition to that, you’ve got the financial sponsors and the sovereign wealth funds,” Venkatakrishnan said. “The growth of concentrated pools of capital makes it important to have that full relationship with those players in the market.”
Barclays and its rivals are betting that sovereign wealth funds will continue to deploy billions of dollars to get private equity takeovers across the line amid a broader dearth in deals by corporations. Sovereign wealth funds spent a record $17.2 billion on such co-investments in the first half of last year, which was up 24% from the same period in 2022, Bloomberg has previously reported.
Read more: Private Equity Titans Tap Sovereign Wealth to Get Deals Done
Barclays shares have struggled in recent years and the bank has long faced questions about the viability of its investment bank because of the amount of capital it consumes relative to other, higher-returning parts of Barclays’s business.
But Venkatakrishnan has said that is because it has a larger footprint in debt capital markets relative to peers. That is why he’s now focused on expanding in merger advisory and stock underwriting.
“When you move into advisory fees you start getting a better return on your capital — I think it is an important part of the shift,” he said on Monday. “Our job is to, having created the plan, is to execute it and the share price hopefully will follow.”
Barclays last month announced it would go on a £2 billion ($2.55 billion) cost-cutting drive and reorganize its reporting structure in order to boost profits. The bank vowed to return at least £10 billion to shareholders in the coming years, while it boosts revenue to £30 billion.
Shares of Barclays have surged 9.3% since it unveiled those plans on Feb. 20, making it one of the best performers in the FTSE 100 Index.
As part of the changes, Venkatakrishnan also shuffled his top managers. Adeel Khan was appointed sole head of the global markets division, while his former co-head Stephen Dainton became president of Barclays Bank Plc and head of investment bank management. Cathal Deasy and Taylor Wright are continuing in their current roles as co-heads of banking.
Three Black bankers lose UK race discrimination claim against Barclays
Three Black bankers, who sued Barclays (BARC.L) for a combined 52.8 million pounds ($66.7 million) in London over allegations that included race discrimination, harassment, victimisation and whistleblower detriment, have largely lost their case.
In a near 460-page judgment, the East London Employment Tribunal dismissed the bulk of claims brought by Louis Samnick, a former vice president, vice president Christian Abanda Bella and Henry-Serge Moune Nkeng, an assistant vice president.
The three men of Cameroonian background, who represented themselves in the lengthy case, had alleged they had been bullied, harassed and denied promotion and appropriate support, in part because of their race.
Samnick, a former vice president in the bank's credit risk model validation team, and Abanda Bella, a quantitative analyst, succeeded with a claim that Barclays had failed to make reasonable adjustments for their disabilities during a 2019 performance review.
In a judgment made public on Wednesday, the judge said health issues faced by Samnick and Abanda Bella were sufficiently significant to allow them compensation for this part of the claim. All other complaints failed.
Barclays did not immediately reply to a request for comment and Reuters was unable to reach the claimants.
Abanda Bella joined Barclays in 2017 but has been signed off work with depression since 2019. In his 2019 appraisal, carried out in his absence, his performance was assessed as "needs improvement". Samnick, who received the same 2019 performance rating, had been on sick leave since September 2019.
Ranked as a vice president for 10 years, Samnick resigned in 2021 after securing another bank job at executive director grade, the judgment showed.
A remedy hearing will be called if the parties cannot agree compensation for the single failure to make reasonable adjustments for disabilities.
Qube Research & Technologies, the London-based quant hedge fund firm spun out of Credit Suisse in 2018, has built the largest ever short position against Barclays, representing 0.73% of the bank’s stock, according to a report by The Times.
Qube’s short wager comes despite a recent uptick in the bank’s stock price after Chief Executive CS Venkatakrishnan unveiled a turnaround plan aimed at reviving the lender’s fortunes, and suggests that Qube, or its algorithms, believe the rally will be temporary.
Venkatakrishnan, who has been under pressure to boost Barclays’s stock market valuation to bring it more inline with its European and US peers, pledged on 20 February to return at least £10bn to shareholders over three years, cut costs and lift annual revenues to £30bn by 2026.
Shares have since surged by 20% to 177.5p, the stock’s highest level in a year.
The report cites regulatory fillings as revealing that Qube has been increasing its short wager against Barclays during the course of the share price rally, after reaching the 0.5% threshold that triggers disclosure of short bets to City watchdog, the Financial Conduct Authority (FCA), on 27 February.
The report also quotes a Qube spokesman in saying that the company’s trading did not reflect a “fundamental view on any individual name” and that the firm had “no specific view on Barclays”.
Https://uk.finance.yahoo.com/news/barclays-plcs-dividend-analysis-141126321.html
Barclays to sell $1.1bn of US credit card debt to Blackstone
Barclays (BARC.L) has agreed to sell about $1.1 billion of credit card debt in the United States to Blackstone , in a deal the British bank said would free up capacity to expand lending and reduce balance sheet risk.
Barclays said the agreement reflected its recently-announced strategy to prioritise growing lending to consumers, and would reduce the bank's risk weighted assets by around 1 billion pounds.
Banks globally have been making greater use of credit risk transfers to shed risk from loan portfolios, Reuters has reported, with investors sharing the risk of losses.
Blackstone's investment has been made through insurance accounts managed by the company's asset-based finance group. Barclays will continue to service the accounts for a fee.
Barclays' investment bank acted as an advisor to Blackstone on the transaction.
"During our Investor Update, we said that we would leverage strategic partnerships to execute risk transfer agreements to reduce capital requirements. I am delighted to announce this first agreement in our U.S. cards book," Barclays Finance Director Anna Cross said.
Barclays PLC (LON:BARC) will increase its dividend on the 3rd of April to £0.053, which is 6.0% higher than last year's payment from the same period of £0.05. Although the dividend is now higher, the yield is only 4.9%, which is below the industry average.
See our latest analysis for Barclays
Barclays' Earnings Will Easily Cover The Distributions
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Having distributed dividends for at least 10 years, Barclays has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Barclays' payout ratio of 29% is a good sign as this means that earnings decently cover dividends.
Over the next 3 years, EPS is forecast to expand by 47.1%. The future payout ratio could be 29% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was £0.065 in 2014, and the most recent fiscal year payment was £0.08. This works out to be a compound annual growth rate (CAGR) of approximately 2.1% a year over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Barclays has impressed us by growing EPS at 25% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Barclays Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Https://uk.finance.yahoo.com/news/terry-smith-never-invests-banks-130000308.html
Https://uk.finance.yahoo.com/news/barclays-must-face-u-shareholder-154520738.html
Part 2
Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
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.
Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
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.
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.