Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
By Amy-Jo Crowley, Pablo Mayo Cerqueiro and Milana Vinn
LONDON/NEW YORK (Reuters) - Barclays Plc is exploring the sale of a stake in the unit that processes payments for UK merchants as the British bank seeks a partner to help grow the business, four people familiar with the matter told Reuters.
The bank is considering bringing in a partner with the strategic "know-how" to expand the business, as well as raising capital, but has yet to decide how big a stake it might sell, said the people.
The business could be valued at at least 2 billion pounds ($2.5 billion), based on estimated earnings before interest, tax, depreciation and amortisation (EBITDA) of about 300 million pounds and similar deals, one of the people said.The early-stage discussions are part of a review into its global payment activities spanning merchant acquiring and credit card services, said the people, who spoke on condition of anonymity.
Barclays distributed a presentation on its domestic merchant acquiring unit to potential bidders - mainly specialist payments providers - over the summer, two of the people said, but plans may still be altered or dropped entirely.
A spokesperson for Barclays said: "We don't comment on speculation. Our businesses continue to perform well and growing our global payments business is a priority for us."
Reuters reported earlier this year that Barclays, led by Chief Executive CS Venkatakrishnan, had launched a review of its global payments footprint as it debates how to best allocate capital among its divisions and boost its share price.
The group drafted in consultants to prepare separate financials for its domestic merchant acquiring operation in an initiative known internally as Project Hyperion, one of the people said.
It mirrors moves by other European lenders which have sought to monetise their payments operations, including Spain's Banco Sabadell and Italy's Intesa Sanpaolo.
Barclays is also gauging interest in its German consumer finance operations, known as Barclaycard Germany.
The London stock market is past its best and needs urgent reform to return to its former glory, a City veteran has warned.
Richard Buxton, who retired this week after a decades-long career, including stints at Jupiter Fund Management and Schroders, said yesterday that the decline of the London Stock Exchange has been 'the tragedy of his career'.
He said pension funds and insurers have had to invest in 'seemingly safe fixed income investments' over the stock market due to a belief that equities are risky because they're volatile. But he added that to 'a long-term saver, daily volatility, and indeed daily liquidity, is completely irrelevant'.
Buxton blamed this regulation for making the City of London a less attractive place for businesses looking to go public and backed attempts by the government to reignite the stock exchange.
Chip designer Arm has announced that it will list in New York this year in a bid to secure a higher valuation, in a blow to London.
The latest data from auditor EY showed that the number of London initial public offerings fell sharply in the first months of 2023 compared to the previous two years.
Between January and March this year, there were two floats on the main market, raising a total of £63m. However, in the same period of both 2022 and 2021 there were 12 new London main market listings.
Clearly at the moment, companies are choosing to list in New York because they have got liquid equity-oriented savings culture, which we've now abandoned,' Buxton told the BBC.
'If you can resuscitate that then of course companies will come back and be interested in listing in London, if there is the appetite.'
He pointed to some industries he believes will be big growth areas in the UK, including those related to the energy transition, as well as IT, healthcare and life sciences.
If the UK stock market is cheap, why doesn’t it go up? | Financial Times
https://www.ft.com/content/726a6188-f04c-40e4-b7d1-a055d75e772c
It’s not often I read financial news that genuinely grips me, but I came to life on Wednesday when reading a headline about Barclays (LSE: BARC) shares.
According to analysts at one US investment bank, Barclays shareholders are in line for a windfall totalling £10bn between now and 2025. That’s good news for me and my wife, as she bought the Blue Eagle bank’s stock at a price of 154.5p a share last July.
Barclays shares bounce around
Over the past year, the price chart for this FTSE 100 stock looks like the teeth of a saw: up, down, up, down and so on.
As I write close to Wednesday’s market close, the Barclays share price stands at 154.3p. This values the business at £24bn. To me, this seems a modest price tag for one of the UK’s leading lenders.
What’s more, the shares have zigzagged wildly this calendar year, moving between a high of 198.86p on 8 March to a low of 128.12p on 20 March. That’s mighty volatile for a Footsie stock.
Here’s how the shares have performed over seven different timescales:
Share price
154.3p
One day
+0.6%
Five days
-1.7%
One month
-3.6%
Year to date
-2.7%
Six months
-2.4%
One year
-3.8%
Five years
-20.5%
Over all five periods ranging from five days to a year, the Barclays share price has crept downwards. Worse still, it has lost more than a fifth of its value over five years.
Then again, these figures exclude cash dividends, which account for a large slice of the long-term returns from owning bank stocks. And speaking of dividends…
£10bn for shareholders?
According to analysts at US investment bank Jefferies, Barclays could return as much as £10bn to its many owners over the next 2.5 years.
According to a report by Bloomberg, the bank has recruited Boston Consulting Group to undertake a strategic review to tackle the long-term weakness in its share price. And Jefferies argues that the best way to do this would be through large-scale share buybacks.
Jefferies’ forecast of total dividends and stock repurchases from now to financial year 2025 is £10bn. This includes £1.5bn of buybacks this year, followed by £2.2bn in 2024 and the same in 2025. Given that Barclays shares trade well below their book value, this programme would make great financial sense.
In its report’s conclusion, Jefferies raised its price target for Barclays stock to 320p from 300p previously. That’s a potential upside of 107.4% from the current price.
This stock still looks cheap to me
At their present price, Barclays shares trade on a lowly price-to-earnings ratio of 4.7, for an earnings yield of 21.2%. What’s more, their historic dividend yield of 4.7% a year is covered a whopping 4.5 times by earnings.
Then again, this stock has been a value trap for years, since the global financial crisis of 2007-09 crushed bank shares. And Barclays faces some strong headwinds, including falling house prices, rising interest rates, and rising bad debts and loan losses in
With more promising numbers than last year, Barclays’ basic earnings per share (EPS) should rise in 2023. As a matter of fact, analysts are currently pricing in a rise from 30.1p in 2022, to 32.2p in 2023, and then 35.4p in 2024.
Provided these projections are met, it’s likely that the FTSE 100 stalwart will increase its dividend payments. As such, analysts are forecasting the company to pay a dividend of 8.6p per share in 2023, and then 9.7p per share in 2024. This would amount to a forward yield of 6.1% and 6.9%, respectively.
8 analysts have issued 1 year price targets for Barclays' shares. Their BARC share price forecasts range from GBX 180 to GBX 299. On average, they expect the company's stock price to reach GBX 239.63 in the next twelve months. This suggests a possible upside of 49.9% from the stock's current price.
Lehman says Barclays got $13 billion windfall in sale | Reuters
https://www.reuters.com/article/us-lehman-barclays-idUSTRE62H5K920100318
Paying dividends
With more promising numbers than last year, Barclays’ basic earnings per share (EPS) should rise in 2023. As a matter of fact, analysts are currently pricing in a rise from 30.1p in 2022, to 32.2p in 2023, and then 35.4p in 2024.
Provided these projections are met, it’s likely that the FTSE 100 stalwart will increase its dividend payments. As such, analysts are forecasting the company to pay a dividend of 8.6p per share in 2023, and then 9.7p per share in 2024. This would amount to a forward yield of 6.1% and 6.9%, respectively.
Barclays PLC 2023 Annual General Meeting (AGM)
The Barclays PLC 2023 AGM will be held on Wednesday 3 May 2023 at 11:00 am (UK time) at QEII Centre, Broad Sanctuary, Westminster, London SW1P 3EE and electronically on an online platform as described in the Notice of Meeting available here.
The Board strongly encourages shareholders to vote in favour of all resolutions by completing their proxy forms.
Accountancy giant KPMG has revealed that US companies are turning away from the UK because of the high tax burden and a perceived lack of economic ambition.
Policy head Tim Sarson said that a growing number of US giants are expressing concerns about the lack of competitiveness in the UK, with many deciding against investing in the country last year.
The impending corporation tax hike – set to increase from 19% to 25% next month – is sending out the wrong signal, and is putting off potential investors. This has put pressure on Chancellor Jeremy Hunt to reconsider the proposed increase.
Sarson added that there is “a general sense the UK is not quite what it was,” which will increase the pressure on Hunt to scrap the planned tax increase. He also said that many US companies are making “loud noises” about the lack of competitiveness of the UK regime.
The Chancellor has faced calls from Tory MPs and industry chiefs to cancel the increase, arguing that it will drive investment away and stifle economic growth. The reluctance of US firms to invest in the UK is a further blow to the country’s economic prospects.
What they didn’t know was that it was the night before I was appointed the group chief executive. There was a strange circularity to it all.
When the South Kensington branch closed, staffing had gone down to eight people; massive deskilling of the whole industry without any uplift in customer service. The banks have, however, done a good job at innovating. We’ve seen the growth of internet and mobile banking, contactless payment for low value transitions but with the decline of branch networks.
Read More: Martin Warner, 'UK's Elon Musk', on his business career
When I set up 10x, I wanted to use modern technology to create a platform which would actually deliver the customer service that I believed the customer deserved. That’s where the threads of 40 years ago really come up to what I am doing today.
Back then they were real life issues when you were sitting across from somebody and dealing face-to-face with a customer. That ‘my first boss’ experience has stayed with me for my whole career.
I think the industry has today lost sight of the fact that we are here to serve customers. It’s not true everywhere, but if you asked people about their bank or credit card company today, most will say they are probably the same.
There is no substitute for a 22-year-old facing a customer across the counter who had a real problem – a lost cheque book or money issues – and it was up to me to solve it as quickly and comprehensively as possible. That is the job of banks and I think sometimes the industry forgets that.
Antony Jenkins is the former group chief executive of Barclays, following a three-year stint as its CEO and three years as Barclaycard CEO. He also spent 16 years at Citigroup as EVP.
Jenkins, 61, founded 10x Banking in 2016, his venture dedicated to shaping the corporate bank of the future, fuelled by digital transformation.
When I first started in banking at London’s South Kensington branch of Barclays Bank, my first boss really was the customer.
This is important for me as I learned a lot. It was 1983 and as a graduate trainee the first port of call was being sent to a local branch. In those days they were fully serviced for the local community, from well-heeled customers to local hair salons, solicitors, waiters, hotel staff and architects. It was end-to-end full service and a complete business unit – all paper based – with 30 staff working there.
Read More: Sally Walker, Britain's spy chief on her first boss
I didn’t know anything about Barclays’ products, but with the customers there were also quite a lot of wealthy people and tourists. We would store wills, we would put money on deposit, buy and sell stocks, foreign exchange and open bank accounts for students. It was a varied exposure for day-to-day financial services.
There were several things that also struck me about my experiences.
When people came in with a financial problem, it was often something that was making them anxious or they felt intimidated as it affected their money. How people connect to their money was inherently a difficult experience.
What I learnt was that banking is about customers; it sounds obvious but most of the banking industry doesn't think like that. They think about selling products. We had a 300-page paper manual with every product a customer could get from a branch and where I would go to find the answer. I recognised that if you could solve the problem when they were in the branch, you could really make them happy and take a burden off them.
The other thing I realised was that if you could do it in a way that made the customer's life easier, it would be a good thing for the bank and the customer, who would be more loyal over time. Years later, when I was at Barclays, we did a survey of our 1,500 branch network and found that the best customer satisfaction had the highest level of colleague engagement and profitability.
Operational excellence was an aspect that has also stayed with me. Everything in the branch had to be reconciled at the end of the day – the tech was horrible and we might have had a fax machine at best – and nobody went home until it did. It was very diverse in what you got to see in that early exposure of the front-facing part of banking.
When I returned in 2006 to Barclays, I had various jobs which included running the retail bank. They were going to close the South Kensington branch, knew that I had started my career there and so invited me to the closing party. What they didn’t know was that it was the
Investors in Barclays PLC BCS need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 17, 2023 $15.00 Put had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for Barclays shares, but what is the fundamental picture for the company? Currently, Barclays is a Zacks Rank #1 (Strong Buy) in the Banks - Foreign industry that ranks in the Top 5% of our Zacks Industry Rank. Over the last 60 days, the Zacks Consensus Estimate for the current quarter has moved from 30 cents per share to 32 cents.
Given the way analysts feel about Barclays right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
Despite the second quarter drop in profits, Barclays kept its bonus pool steady, ringfencing just over £1bn to help compensate top bankers over the first six months of the year.
The pot, which is reserved for Barclays’ best performers, will be built up over the next six months and shared among bankers and executives, including Venkatakrishnan, in the spring, when payouts are usually made.
The bank is now ahead of where it was pre-pandemic in share price terms and the impairment release points to confidence in its lending book.
'The increased dividend and share buyback programme are rewards for patient shareholders, and the sense of optimism in today’s statement suggests there could be more to come. Barclays is in a strong position and, with a more diversified income base, looks to be one of the best positioned among the UK’s major bank.'