First-half results from Barclays (BARC) inspired more investor optimism than the bank's 2015 full-year figures. Pre-tax losses from its non-core segment may have increased to £1.9bn from £745m a year earlier, but the overall loss before tax was not as bad as the market had been expecting. What's more, management expects non-core costs for 2017 to be between £400m and £500m - well below what was previously expected.
Core business credit impairment charges were up £152m to £931m, largely due to loans to the oil and gas sectors, as well as tighter impairment modelling for the UK consumer side of its Barclaycard business. Litigation costs fell across the board: for Barclays UK, which includes domestic Barclaycard, personal and small business operations, these costs more than halved to £400m, pushing pre-tax profits up from £712m to £1.1bn. Higher margins on deposits increased income from personal banking here by a nudge to £1.9bn.
The investment banking business had a tougher time, not just because of challenging equity markets, but due to larger impairment and restructuring costs. On the brighter side, strong inflows into fixed-income meant the credit operation grew its contribution by a third to £591m. The international credit card business also performed strongly, with continued growth in Barclaycard US.
Analysts at Cenkos expect tangible book value per share of 277p at December 2016, up from 275p a year earlier.
BARCLAYS (BARC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 159.1p | MARKET VALUE: | £26.9bn | |
| TOUCH: | 159.05-159.15p | 12-MONTH HIGH: | 290p | LOW: 121p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | NA | |
| NET ASSET VALUE: | 372p | LEVERAGE: | 21.7 | |
| Half-year to 30 Jun | Total operating income (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 12.2 | 2.60 | 8.7 | 2 |
| 2016 | 11.2 | 2.06 | 6.0 | 1 |
| % change | -8 | -21 | -31 | -50 |
Ex-div: 11 Aug Payment: 19 Sep | ||||
