LONDON – November 5, 2020: Fog envelops the Canary Wharf business district, including global financial institutions Citigroup Inc., State Street Corp., Barclays Plc, HSBC Holdings Plc and business office block No. 1 Canada Square.
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LONDON- Barclays reported a fourth-quarter net loss of 111 million pounds ($139.8 million) on Tuesday as the British lender announced a broad strategic review, boosting its shares more than 6% in early trades .
Analysts polled by Reuters had expected net profit attributable to shareholders of £60.95 million for the quarter, LSEG data showed, as Barclays embarks on a major restructuring program in a bid to reverse falling profits.
For the full year, attributable net profit came in at £4.27 billion, down from £5.023 billion in 2022 and below consensus forecasts of £4.59 billion.
The bank also announced a further £1 billion in share buybacks and will set out a new three-year plan designed to further improve operational and financial performance, CEO CS Venkatakrishnan said in a statement.
Barclays suffered a £900m decline in the fourth quarter due to structural cost-cutting measures, which are expected to result in gross cost savings of around £500m this year, with an expected recovery period of less than two years.
Here are some other highlights:
- Group revenue in the fourth quarter was £5.6 billion, down 3% on the same period last year.
- Credit impairment charges were £552 million, up from £498 million in the fourth quarter of 2022.
- The Common Equity Tier 1 (CET1) capital ratio, a measure of the bank’s financial strength, was 13.8%, down from 14% in the previous quarter.
- Return on tangible capital (RoTE) for the full year was 10.6% excluding fourth quarter restructuring costs. Fourth quarter RoTE was 5.1%, down from 8.9% in the final quarter of 2022.
- Total quarterly operating expenses remained virtually unchanged year-on-year at £4 billion.
Barclays’ traditionally strong corporate and investment banking (CIB) momentum – particularly in its fixed income, currency and commodities trading division – has waned in 2023 as market volatility moderates.
On Tuesday, the bank announced a huge operational overhaul, including substantial cost cuts, asset sales and a reorganization of its business divisions, while promising to return £10 billion to shareholders between 2024 and 2026 through dividends and buybacks of own shares.
The business will now be split into five operating divisions, separating corporate and investment banking to form: Barclays UK, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank and Barclays US Consumer Bank.
“This resegmentation will provide better and more granular disclosure of the performance of each of these operating divisions, along with greater accountability from an operational and management perspective,” the bank said in its report.
Barclays is targeting total gross cost savings of £2 billion and a RoTE of more than 12% by 2026.
This is breaking news and will be updated shortly.