- Fewer fines and a better cost performance
- Dividend and capital returns at high levels
It is fair to say that the banking sector is going through a strange post rate-hike hangover, as the initial rush of excitement over rising margins gives way to worries over bad debts and threats of regulatory intervention over savings rates and capital ratios, both here and in the US. Barclays (BARC) showed again that investors find the bank’s hybrid model hard to like in either good or bad times. Even though profits rose significantly on the back of rate hikes, a relative lack of regulatory fines, plus savings from restructuring parts of the investment bank, were behind a significant portion of that improved performance. Despite the £750mn share buyback in these results, they were hardly the basis for celebration and the market grumpily marked down the shares on an otherwise indifferent trading day for the rest of the FTSE 100.