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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Barclays Plc    BARC   GB0031348658

BARCLAYS PLC

(BARC)
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Barclays beats profit forecasts as CEO Staley aims to stay on

10/23/2020 | 05:14am EST
FILE PHOTO: A Barclays bank building is seen at Canary Wharf in London

LONDON (Reuters) - Barclays on Friday reported stronger than expected third-quarter results thanks to a return to profit for the bank's consumer businesses and Chief Executive Jes Staley said he aimed to stay on for two more years.

There has been speculation over Staley's future since Barclays disclosed in February that British regulators had launched an investigation into Staley's past connections to the late financier and convicted sex offender Jeffrey Epstein, which is yet to conclude.

British media reports around the same time said the bank's board had appointed a headhunter to search for a successor and that Staley himself had indicated internally that he would leave by 2021.

Staley, who was appointed CEO in 2015, has said he regrets having had any relationship with Epstein.

"I think we'll be here for another couple of years," Staley told reporters on a conference call on Friday.

Barclays is the first major British bank to publish third- quarter earnings and analysts and investors are watching results for any signs of an expected wave of bad loans due to the fallout from COVID-19 pandemic.

Barclays reported profit before tax of 1.1 billion pounds ($1.4 billion) for the three months to the end of September, almost double the 507 million pounds analysts had forecast.

The bank's shares jumped following its results and were up nearly 7% at 0855 GMT, the strongest performer in the benchmark FTSE 100 index.

"While these results aren't exactly pretty, they're far less ugly than we had feared they might be," Nicholas Hyett, equity analyst at Hargreaves Lansdown, said.

The bank booked 608 million pounds in provisions for bad loans and other charges, down 63% from the previous quarter and well below the 1 billion pounds analysts had expected.

However, Barclays said it was considering further cost-cutting measures, which could result in more charges.

Staley said these could include reductions in office space and other such overheads as the bank learns lessons from employees' ability to work from home or at branches during the coronavirus pandemic.

The bank's consumer, cards and payments business made a profit of 165 million pounds in the quarter after a loss in the second quarter as U.S. credit card spending recovered.

The stronger-than-expected results boosted the bank's core capital ratio, a key measure of its financial strength, to 14.6%, which was also above forecasts for 14%.

INVESTMENT BANK SHINES

The lender's investment bank supported its results, as it has done in recent quarters, in a fillip for Staley who has staked much of his credibility on the business at a time when some shareholders want it cut back.

Revenue from its markets division, which has benefited from frenzied trading amid volatile markets worldwide, rose 29% from a year earlier to 1.69 billion pounds. Equities trading jumped 40% to 691 million pounds while fixed income, currencies and commodities rose 23% to 1 billion pounds.

Like its rivals, Barclays has halted dividend payments at the request of Britain's regulators. It said it would give an update on its payout policy when it reports full-year results.

Barclays downgraded its baseline economic forecast for the United Kingdom this year as local lockdowns kick in to control a second wave of COVID-19 heading into the winter months.

The bank now expects gross domestic product to fall 10.3% this year, versus its June forecast of an 8.7% drop, but it said there had been no significant rise in bad loans so far due to government financial support for jobs and companies.

U.S. banks, which reported earnings earlier this month, gave a muddied picture of what to expect, with balance sheets looking healthier than expected but executives forecasting a gloomy outlook for losses from loans.

Barclays' British rivals all report earnings next week, with HSBC on Tuesday, Standard Chartered and Lloyds Banking Group on Thursday and NatWest Group on Friday.

($1 = 0.7656 pounds)

(Reporting By Lawrence White and Iain Withers; Editing by Rachel Armstrong, Jane Merriman and David Clarke)

By Lawrence White and Iain Withers


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BARCLAYS PLC 2.58% 146.94 Delayed Quote.-18.20%
HARGREAVES LANSDOWN PLC -0.33% 1491.5 Delayed Quote.-22.89%
HSBC HOLDINGS PLC 3.02% 418.35 Delayed Quote.-29.32%
LLOYDS BANKING GROUP PLC 1.23% 38.745 Delayed Quote.-38.01%
MSCI UNITED KINGDOM (STRD, UHD) 1.04% 1009.276 Real-time Quote.-16.09%
STANDARD CHARTERED PLC 2.22% 487.5 Delayed Quote.-31.57%
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Financials
Sales 2020 21 576 M 28 833 M 28 833 M
Net income 2020 1 090 M 1 456 M 1 456 M
Net Debt 2020 - - -
P/E ratio 2020 22,9x
Yield 2020 1,25%
Capitalization 25 501 M 34 023 M 34 078 M
Capi. / Sales 2020 1,18x
Capi. / Sales 2021 1,23x
Nbr of Employees 80 800
Free-Float 99,6%
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Technical analysis trends BARCLAYS PLC
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 151,64 GBX
Last Close Price 146,94 GBX
Spread / Highest target 59,9%
Spread / Average Target 3,20%
Spread / Lowest Target -50,3%
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Managers
NameTitle
James Edward Staley Group Chief Executive Officer & Director
Nigel Paul Higgins Group Chairman
Mark Ashton Rigby Group Chief Operating Officer
Tushar Morzaria Group Finance Director & Executive Director
Timothy James Breedon Independent Non-Executive Director
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