Barclays Stock Down On Weak Q4, FY22 Profits

Shares of Barclays Plc were losing around 9 percent in the early morning trading in London as well as in pre-market activity on the NYSE after the British banking major reported Wednesday lower profit in its fourth quarter and fiscal 2022 on charges. However, income and net interest income improved mainly as weakness in Corporate and Investment Bank segment was offset by strong growth in Consumer, Cards and Payments segment.

Further, Barclays announced full-year dividend of 5.0p per share, to be paid on March 31, to shareholders on the register as on February 24. The company also confirmed a share buyback of up to 0.5 billion pounds, which is expected to commence in the first quarter of 2023.

Venkatakrishnan, Group Chief Executive, said, “Barclays performed strongly in 2022. Each business delivered income growth, with Group income up 14 percent…. We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”

Looking ahead for fiscal 2023, the company targets RoTE of greater than 10 percent. In 2023, Barclays UK net interest margin is expected to be greater than 3.20 percent. Further, the company targets a cost: income ratio percentage in the low 60s in the new year, investing for growth whilst progressing towards the medium-term target of below 60 percent.

Further, Barclays announced that Stephen Shapiro will be stepping down from his role as Company Secretary with effect from today. Shapiro will continue in his existing role as Group General Counsel.

Hannah Ellwood has been appointed as Company Secretary on an interim basis.

In the fourth quarter, Barclays’ profit before tax was 1.31 billion pounds, down 8 percent from 1.43 billion pounds a year ago.

Attributable profit dropped 4 percent to 1.04 billion pounds from prior year’s 1.08 billion pounds. Earnings per share, meanwhile, went up to 6.5 pence from 6.4 pence last year with lower sharecount.

Profit before impairment was 1.81 billion pounds, up 29 percent year-on-year.

In the quarter, total operating expenses declined 6 percent from last year to 4 billion pounds.

Income for the period was 5.80 billion pounds, a growth of 12 percent from 5.16 billion pounds a year ago.

Net interest income of 2.74 billion pounds improved from 2.23 billion pounds a year ago.

The income growth was benefited by strong performances in Barclays UK and Consumer, Cards and Payments.

Barclays UK income climbed 16 percent year-over-year to 1.97 billion pounds, and Barclays International income grew 10 percent to 3.86 billion pounds.

Corporate and Investment Bank income dropped 2 percent, offset by a 46 percent climb in income from Consumer, Cards and Payments.

In fiscal 2022, profit before tax decreased 14 percent from last year to 7.012 billion pounds. Attributable profit dropped 19 percent to 5.023 billion pounds or 30.8 pence per share.

Group profit before impairment was 8.2 billion pounds, up 9 percent year-on-year. Total income for the Group rose 14 percent to 24.956 billion pounds.

In London, Barclays shares were trading at 171.50 pence, down 8.5 percent.

In pre-market activity on the NYSE, the shares were trading at $8.36, down 9.3 percent.

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