Skip to content
Search

Latest Stories

Barclays focuses on Britain, cost cuts, buybacks to woo investors

The strategy update came as Barclays reported a 6 per cent fall in annual profit to £6.6 billion, as a higher charge for potential bad loans weighed

Barclays focuses on Britain, cost cuts, buybacks to woo investors

Barclays laid out a three-year plan to revive its flagging share price on Tuesday, including axing £2 billion of costs, returning £10 billion to shareholders and investing in its high-returning UK retail bank.

Shares in the British bank rose by as much as 7% after the announcement of the plan by Barclays Chief Executive C.S. Venkatakrishnan, who is known internally as Venkat, which also included a shake-up of its operating divisions.


The bank's first strategy update in almost a decade marks an inflection point for the CEO as he tries to improve returns after a period of management turmoil and underwhelming results.

The update included plans to cut £1 billion in costs in the near term and to review the future of its payments business, both earlier reported by Reuters.

Details on exactly how Barclays would achieve both the cuts and a modest de-risking of its investment banking business were yet to be disclosed.

"(There's) no huge change in the shape of the bank but that was always fairly unlikely," said Richard Marwood, portfolio manager at Royal London Asset Management.

"Retiring equity makes sense when the shares trade at half of their book value," he said of the plan to return almost half Barclays' market value to shareholders between 2024-2026.

The strategy update came as Barclays reported a 6 per cent fall in annual profit to £6.6 billion, in line with analyst forecasts, as a higher charge for potential bad loans weighed.

Analysts at JPMorgan said the update could imply upgrades to forecasts for the bank's performance, but the plans relied on revenue growth and the focus would be on its execution.

Barclays cut 5,000 jobs in 2023, chief financial officer Anna Cross told reporters, with much of the cuts falling across back office roles. Reuters first reported the cuts.

Barclays also said it would review the future of its payments business, as first reported by Reuters, with details to be unveiled later on Tuesday.

The bank said it would return a total of £3 billion to shareholders for 2023 – up 37 per cent on the previous year – including a fresh share buyback of £1 billion and a 5.3 pence per share final dividend.

New Structure

Investors in Barclays, which has one of the lowest valuations among European peers, have grown impatient with its wilting share price and some favour simplifying its investment bank, Reuters reported earlier this month.

The pitch from Barclays to its shareholders resembles that by rival Deutsche Bank, which on Feb. 1 said it would cut 3,500 jobs, buy back shares and splash out dividends in a bid to convince the market its own turnaround was on track.

Germany's biggest bank has focused on growing its retail bank over its investment bank since 2019, a path which many Barclays investors hoped the British lender would emulate.

Corporate and investment bank income fell 4 per cent to £12 billion in 2023, Barclays said, as client activity fell in both the markets and investment banking advisory businesses.

Barclays said it would reorganise its business into five new operating divisions to provide clearer disclosure on performance and management accountability.

As part of the shake-up, the bank's head of corporate and investment banking, Paul Compton, long seen by many inside the bank as a potential successor to Venkat, will step back from his current role and become chairman of the unit.

Barclays said it would target a return on tangible equity - a key measure of performance-- greater than 10 per cent in 2024, with targets rising to more than 12 per cent in 2026. (Reuters)

More For You

Shein-Reuters

Shein had aimed to go public in London in the first half of this year, subject to regulatory approvals in the UK and China. (Photo: Reuters)

Shein cuts valuation to £40 billion for London listing

SHEIN is preparing to lower its valuation to around £40 billion for a potential initial public offering (IPO) in London, according to three Reuters sources familiar with the matter.

This is nearly 25 per cent lower than the company's 2023 fundraising valuation as it faces increasing challenges.

Keep ReadingShow less
Northern-Superchargers-Getty

Ben Stokes and Matthew Short of Northern Superchargers walk out to bat during The Hundred match between Manchester Originals and Northern Superchargers on August 11, 2024 in Manchester, England. (Photo: Getty Images)

Sunrisers Hyderabad to acquire Northern Superchargers in £100 million deal

INDIAN Premier League franchise Sunrisers Hyderabad is set to become the first full owners of an English Hundred team after agreeing to buy Yorkshire’s Northern Superchargers for a reported £100 million.

The Sun Group will be the third IPL-linked investor in the eight-team Hundred competition, following Reliance Industries, which owns Mumbai Indians, and RPSG, which runs Lucknow Super Giants.

Keep ReadingShow less
BT-Getty

A view of the British Telecom (BT) headquarters in central London. (Photo: Getty Images)

BT to remove diversity targets from manager bonuses

BT will remove diversity, equity, and inclusion (DEI) targets from its manager bonus scheme, replacing them with a measure of overall employee engagement.

The change, set to take effect in April, follows consultation with major investors and has received “strong support,” according to the company, The Telegraph reported.

Keep ReadingShow less
India's central bank cuts interest rates for first time since 2020

The central bank announced a 25-basis-point cut in the benchmark repo rate to 6.25 per cent, the rate at which it lends to commercial banks.. (Photo credit: Reuters)

India's central bank cuts interest rates for first time since 2020

THE RESERVE BANK OF INDIA (RBI) reduced interest rates on Friday for the first time in nearly five years, citing concerns over economic growth despite inflation risks.

The central bank announced a 25-basis-point cut in the benchmark repo rate to 6.25 per cent, the rate at which it lends to commercial banks.

Keep ReadingShow less
Sri Lanka seeks to negotiate with Adani over renewable energy plants

Gautam Adani

Sri Lanka seeks to negotiate with Adani over renewable energy plants

SRI LANKA’S government started talks with India’s Adani Group to lower the cost of power from two wind power projects the group will build in the island nation’s northern province, the cabinet spokesman said last Tuesday (28).

Sri Lanka has been reviewing the group’s local projects after US authorities in November accused billionaire founder Gautam Adani and other executives of being part of a scheme to pay bribes to secure Indian power supply contracts. Adani has denied the allegations.

Keep ReadingShow less