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Thanks eviking, to expand a tad, US banks earnings kick off the earnings season tomorrow with JPMorgan Chase, Citigroup, and Wells Fargo reporting.

Any mention of distress in commercial real estate and weak loan growth will be pounced on, but stellar results could bolster expectations that a June Fed rate cut is now off the cards.

US consumer sentiment will be interesting after a hotter-than-expected CPI print. Plus, the UK releases monthly GDP and industrial output numbers.

On the basis that, typically, the US Banks set the direction of travel and the UK banks tend to follow, then it should prove to be an interesting follow.

Regards MrA

At the same time, though, the company has vowed to invest more heavily in other areas within the bank, including its UK-focused offerings and its US credit-card arm. For instance, Barclays expects risk-weighted assets to climb by roughly £50 billion ($64 billion) in the coming years and it’s not planning to allocate any of the additional capital to the investment bank.

Managers in the division are also under pressure to trim £700 million in costs by 2026 as they seek to whittle the unit’s cost-to-income ratio down to a percentage in the high-50s. That metric, which shows how much it costs to produce a pound of revenue, ended last year at 69%.

“The simple way to think about it is that we’re looking for the investment bank to grow and to contribute more while consuming less,” Venkatakrishnan said at the event last month.

Bankers on Edge

Inside the investment bank division, staffers have been on edge for months as they awaited executives’ decisions on the fate of the unit, Bloomberg reported late last year.

The division has been reeling from a grim bonus season in which Barclays handed dozens of investment bankers no bonus at all. Tensions have also been running high as executives have spent recent months trying to recover from the period of higher-than-usual attrition last year.

After those departures, the division’s leaders — Cathal Deasy and Taylor Wright — began offering guaranteed bonuses and paying more to those who threatened to leave, Bloomberg reported last month. Those moves further depleted the bonus pool this year, frustrating bankers who stayed, people familiar with the matter said at the time.

The investment bank “is a critical part of Barclays and will continue to be an important part of Barclays,” Venkatakrishnan said last month. “I’m equally clear that there is a lot more to do. Our investment bank has to be higher returning. And, relatively speaking, it has to become a smaller part of Barclays.”

https://www.bloomberg.com/news/articles/2024-03-20/barclays-preparing-to-cut-hundreds-of-jobs-in-investment-bank?utm_content=business&utm_source=twitter&utm_medium=social&utm_campaign=socialflow-organic&cmpid=socialflow-twitter-business&sref=2h1zKciy

Barclays Readies Hundreds of Job Cuts in Investment Bank

Cuts will affect dealmaking, trading and research divisions

Bank embarking on yearslong effort to improve unit’s returns

By Jan-Henrik Foerster and Pamela Barbaglia

20 March 2024 at 18:27 GMT

Updated on 20 March 2024 at 19:06 GMT

Barclays Plc is preparing to cut several hundred jobs within its investment bank division as the firm embarks on a yearslong efforts to trim costs and boost profits within the unit, according to people familiar with the matter.

The cuts will affect staffers in global markets, research and the firm’s investment banking arm, according to the people, who asked not to be identified discussing non-public information. They are expected to take place in the coming months and are part of the firm’s annual cutting of low performers, the people said.

“We regularly review our talent pool to ensure that we can invest in high-performing talent, execute on our strategy, and deliver for our clients,” Barclays said in an emailed statement, which noted it hasn’t finalized the number of roles included in this year’s review.

In recent months, Wall Street giants from Citigroup Inc. to JPMorgan Chase & Co. have turned to job cuts in response to the global slump in dealmaking and capital markets activity. At Barclays, the moves come as the company is kicking off a lengthy push to improve the profitability of its investment bank division, which has been stung by that dearth of activity as well as higher-than-usual attrition among dealmakers.

Barclays has long faced questions from investors about the viability of its Wall Street operations because the investment bank consumes more capital than other, higher-returning divisions across the firm. Last month, Chief Executive Officer C.S. Venkatakrishnan sought to put those questions to rest as he laid out plans for the unit to become more profitable by focusing on boosting its advisory and equity underwriting offerings.

As part of that work, the company has been refocusing its businesses on industries it believes will be most active in the coming years, including financial sponsors and energy companies that are navigating away from greenhouse gas emissions. To that end, Barclays won a mandate to advise Equitrans Midstream Corp. on its $5.5 billion sale to the US natural gas producer EQT Corp. this month.

Barclays Looks to Sovereign Wealth Funds in IB Push

Barclays Chief Executive Officer C.S. Venkatakrishnan says the bank is hoping to expand its relationships with sovereign wealth funds and private equity giants as it looks to broaden its footprint in advisory and equity underwriting.

Morning All,

To those that cannot log-in to this site of citywire.com. I have copied and pasted accordingly.

Regards, Mr A

Activist investor Jeremy Hosking has questioned what he sees as a ‘15-year share price undervaluation’ of Barclays, following the bank’s results today.

The lender implemented a £2bn cost-cutting drive on Tuesday, alongside plans to return £12bn to shareholders over the next three years.

However, the Hosking Partners founder, who is a long-term shareholder in the bank, suggested shareholders had been given a raw deal.

‘The 60% discount to tangible book value either demands surgical action or an acknowledgement that Barclays has massively overstated its shareholders’ funds via dodgy accounting,’ Hosking asked. ‘Which is it to be?

‘Shareholders would benefit from a drastic shrinkage of Barclays’ consolidated balance sheet, the consequential creation of excess capital, and the return of that excess to shareholders via sustained buybacks.’

Barclays’ stock has traded sideways for five years and remains well below its pre-global financial crisis peak of 756p, putting chief executive CS Venkatakrishnan under pressure. Shares in the business were up 5.7% to 158p on Tuesday at 12.15pm.

As part of the shake-up of the firm, £12bn is set to be returned to shareholders via dividends and buybacks over the next three years.

Much of the aforementioned £2bn cost-cutting drive will be in the corporate and investment bank, with £0.7bn of cuts earmarked in this area.

Hosking has been particularly scathing of investment banking, although he does not believe that eradicating this unit would be a silver bullet.

‘Shorn of the investment bank, Barclays would probably carry the valuation afforded Lloyds or Natwest, which would hardly be a case for shareholder rejoicing,’ he said.

‘Shareholders should vote against the re-election of Barclays’ directors until a coherent way forward is in place and agreed with investors. This business-as-usual circus has gone on for too long.’

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