21st February 2019

Barclay's triumphs in the banking sector, sending shares up 4%

  • Net profit, rising revenues for its equity trading operations and a doubling of dividends is welcomed news for investors with share prices rising by 4%
  • £2.2 billion in litigation and conduct charges remain a drag on performance
  • We maintain a medium-risk ‘hold’ recommendation for a balanced portfolio

As Barclays updates the market, Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors:

“Barclays reported better than expected results from its trading activities today, making it one of the winners in the banking sector so far in the current reporting. While overall net profit of £1.4bn was in line with expectations, the equities trading operation saw a 3.4% rise in revenues and the fixed income side reported a 6% drop. The latter may not sound too encouraging for investors but was actually better than most of Barclays’ peers. It wasn’t all good news for the bank as Brexit inevitably reared its head leading to a £150m charge in the final quarter of 2018 due to the increased economic uncertainty.

“The market reacted positively to today’s news sending the shares up 4%. The better than expected news on trading is welcome for CEO Jes Staley, and is timely as the bank is facing up to a possible challenge on its strategy from activist investor Edward Bramson.

“The more than doubling of the dividend to 6.5p is also welcome, but litigation and conduct charges remain a significant drag on performance at £2.2bn last year. We maintain a medium-risk ‘hold’ recommendation for a balanced portfolio.”

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