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High interest rates will certainly help the chancellor if he wants the public to spend. I think the low interest rate environment we see today from the financial crash in 2008 has well and truly been engineered and a deliberate attempt to encourage spending but has failed. So many low to middle class workers just do not have the disposable income.
(Bloomberg) -- After years in the doldrums, Europe’s investment banks had their moment in the sun in 2020. Some seized it and some botched it.
For traders at Barclays Plc, the volatility in the markets brought on by the pandemic delivered their “best year ever,” while three of France’s biggest banks were hit hard, highlighting the split in how investment banks in Europe were able to ride the wildest trading year in a decade.
“2020 was genuinely a game of two halves, with huge fixed-income beats in the first half as equities languished and the French suffered with derivative losses, and then equities and banking fees staged a strong recovery in the second half,” said Jonathan Tyce, a senior European banking analyst at Bloomberg Intelligence. “Barclays had a great year.”
The uneven performance means the debate on how much lenders should focus on investment banking operations will continue, with the focus now on how trading units will fare in 2021. While many of Europe’s investment banking units thrived on the volatility-driven business, the post-pandemic era could change that, said Tyce.
“The pace of trading normalization and increasing competition from the U.S. could render it a distant memory very quickly,” he said.
Barclays on Thursday reported fourth-quarter trading revenue that surpassed analysts’ estimates, helping it outpace larger Wall Street rivals with a 45% surge in markets income for the year. Revenue at the London-based bank’s key fixed-income trading division soared 53% to 5.1 billion pounds ($7.2 billion) last year, the most that unit has reported since 2012. The smaller stocks-trading business climbed 31%.
“We gained market share across almost all the asset classes,” Barclays Chief Executive Officer Jes Staley said in an interview with Bloomberg TV. “We’ve invested in our investment bank for the last five years and I think last year started to pay real dividends and allowed us to be profitable every quarter.”
Profits are expected to plunge by nearly four-fifths when Lloyds presents its 2020 results next week but shareholders will be firmly focused on the bank’s dividend.
The fall in results will be largely defined by the bank’s impairment charges – the amount of bad loans it writes off mainly due to the economic impact of Covid-19 on its customers.
Analysts expect impairments to reach £4.7 billion across the financial year, after an additional £586 million in the bank’s fourth quarter, according to a consensus forecast provided by the company.
It would lead the bank to a pre-tax profit of £905 million, if analysts are correct, a reduction from £4.4 billion a year earlier.
Shareholders will look for a reinstated dividend. The payments were halted last year on the request of the Prudential Regulation Authority to ensure that banks had enough money to support the economy through the Covid-19 pandemic.
Lloyds is expected to pay out 1p per share for the 2020 calendar year when it reports on Wednesday.
TarthDrader
This may answer your question. Posted on Barclays Investor page.
In response to a request from the UK Prudential Regulation Authority and to preserve additional capital for use in serving Barclays’ customers and clients, the Board has agreed to cancel the 6.0p per ordinary share full year 2019 dividend that was due for payment on 3 April 2020. The Board will decide on any future dividend policy and amounts at year-end 2020.
Looks like it wont be paid.