Investors have grown impatient with its wilting share price
20 February 2024 - 10:58
byLawrence White and Iain Withers
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Workers are seen in at Barclays bank offices in the Canary Wharf financial district in London, Britain. Picture: REUTERS/TOBY MELVILLE/FILE
London — Barclays reported a 6% fall in annual profit on February 20, in line with expectations as CEO CS Venkatakrishnan set out a welter of plans, including bumper buybacks, an overhaul of its operations, cost cuts and asset sales to improve performance and lift shares.
Barclays will reorganise its business divisions, return £10bn ($12.59bn) to shareholders between 2024 and 2026, and restructure its payments business, Venkatakrishnan said alongside the bank’s full-year results for 2023.
Barclays CEO CS Venkatakrishnan walks outside the Treasury building, in London, Britain. September 7, 2022. Picture: REUTERS/HANNAH MCKAY
The lender’s first strategy update in almost a decade marks an inflection point for the CEO known internally as Venkat, as he tries to improve returns after a period of management turmoil, self-inflicted wounds and underwhelming results.
Investors in Barclays, which has one of the lowest valuations among its European peers, have grown impatient with its wilting share price and some favour de-risking the lender by simplifying its investment bank, Reuters reported earlier in February.
The bank reported a pretax profit of £6.6bn, down from £7bn the year before and in line with the £6.7bn average of analysts’ forecasts as compiled by the bank.
Barclays said it would return a total of £3bn to shareholders for 2023 — up 37% on the previous year — including a fresh share buyback of £1bn and a 5.3p per share final dividend.
New Structure
Barclays said it would reorganise its business into five operating divisions.
The bank said the “resegmentation” will provide an enhanced and more granular disclosure of the performance of each operating division, and greater accountability from an operational and management standpoint.
It said it would target a return on tangible equity — a key measure of performance — greater than 10% in 2024, with targets rising to in excess of 12% in 2026.
Despite fending off a three-year campaign by activist investor Edward Bramson to shrink its investment bank, Barclays still faces scrutiny over the unit, which delivers fluctuating returns while consuming nearly two thirds of group capital.
Corporate and investment bank income decreased 4% to £12bn in 2023, Barclays said as client activity fell in both the markets and investment banking advisory businesses.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Barclays changes strategy as profit falls
Investors have grown impatient with its wilting share price
London — Barclays reported a 6% fall in annual profit on February 20, in line with expectations as CEO CS Venkatakrishnan set out a welter of plans, including bumper buybacks, an overhaul of its operations, cost cuts and asset sales to improve performance and lift shares.
Barclays will reorganise its business divisions, return £10bn ($12.59bn) to shareholders between 2024 and 2026, and restructure its payments business, Venkatakrishnan said alongside the bank’s full-year results for 2023.
The lender’s first strategy update in almost a decade marks an inflection point for the CEO known internally as Venkat, as he tries to improve returns after a period of management turmoil, self-inflicted wounds and underwhelming results.
Investors in Barclays, which has one of the lowest valuations among its European peers, have grown impatient with its wilting share price and some favour de-risking the lender by simplifying its investment bank, Reuters reported earlier in February.
The bank reported a pretax profit of £6.6bn, down from £7bn the year before and in line with the £6.7bn average of analysts’ forecasts as compiled by the bank.
Barclays said it would return a total of £3bn to shareholders for 2023 — up 37% on the previous year — including a fresh share buyback of £1bn and a 5.3p per share final dividend.
New Structure
Barclays said it would reorganise its business into five operating divisions.
The bank said the “resegmentation” will provide an enhanced and more granular disclosure of the performance of each operating division, and greater accountability from an operational and management standpoint.
It said it would target a return on tangible equity — a key measure of performance — greater than 10% in 2024, with targets rising to in excess of 12% in 2026.
Despite fending off a three-year campaign by activist investor Edward Bramson to shrink its investment bank, Barclays still faces scrutiny over the unit, which delivers fluctuating returns while consuming nearly two thirds of group capital.
Corporate and investment bank income decreased 4% to £12bn in 2023, Barclays said as client activity fell in both the markets and investment banking advisory businesses.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.