(News Bulletin 247) – The title Barclays fell by more than 7% on Wednesday on the London Stock Exchange, investors penalizing quarterly results worse than expected and forecasts considered disappointing.
The British banking group reported this morning a taxable profit of 1.3 billion pounds for the fourth quarter, a performance 12% below analysts’ consensus.
Its investment banking arm suffered from a drop in commissions received on corporate financial transactions and an unexpected fall in income from equity trading, mainly due to the effect of derivatives.
Barclays has announced an increase in its annual dividend to 7.25 pence per share for 2022 from six pence in 2021, as well as the launch of a £500 million share buyback programme.
Analysts expected better on this last point, since the consensus was for redemptions of securities of around 675 million pounds.
Forecasts are also disappointing, with the group saying it expects a net interest margin of more than 3.20% this year at its UK retail banking arm, Barclays UL, where the market was expecting nearly by 3.4%.
This morning, analysts were surprised by these disappointing performances as the current banking environment is considered particularly favorable to British institutions due to soaring interest rates in the United Kingdom.
As a result, Barclays shares fell 8.1% on Wednesday morning following the publication of these results.
‘We do not expect any revaluation of the stock until the group has accumulated more excess capital (in order to redistribute it: the announcement today of share buybacks below expectations does not help) or else reports more optimism about its ability to generate revenue,” say the UBS teams.
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