The Lemon Fool

2022 Results Announcement.

https://www.investegate.co.uk/barclays- ... 00049336P/

Ian (No holding).

Update seems to have gone down badly based on the shareprice reaction.

No holding in Barc but interested because of holding shares in Lloyds & HSBC banks. Is this a sectorial problem or company specific? My initial thoughts are that, in some part, it is the latter.....

https://www.cnbc.com/2023/02/15/barclay ... under.html

"The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion over the course of 2022."

"Wednesday reported a full-year net profit of £5.023 billion ($6.07 billion) for 2022, beating consensus expectations of £4.95 billion but suffering a 19% fall from the previous year’s restated £6.2 billion in part due to a costly trading blunder in the U.S.

Fourth-quarter attributable profit was £1.04 billion, above analyst projections of £833.29 million but down 4% from the £1.08 billion posted in the fourth quarter of 2021."

https://www.reuters.com/business/financ ... 023-02-15/

"Returns on equity booked by the international unit which houses Barclays' transatlantic investment bank fell to 10.2% from 14.4% a year earlier, as fees from advising on debt and equity fundraising plunged by almost two-fifths year on year."


Worryingly for the UK banks (same link to Reuters article as above).

"Barclays' results were further marred by 1.2 billion pounds in credit impairment charges as Britain's economy continued to slow."

Lloyds down 2.3% v HSBA down 0.6% (noise) reflecting their respective focus on UK for profits.

What is it with UK banks that they can't go 6 months without landing a huge fine?

monabri wrote:Update seems to have gone down badly based on the shareprice reaction.

Aye. I see that as I type they're down 8.2%.

Ian ( I hold HSBC in the sector).

idpickering wrote:Ian ( I hold HSBC in the sector).

Sadly, I hold Barclays
I don't see the fall as a buying opportunity

It does make you wonder if BARC and its peers can actually make an acceptable return above the cost of capital over a sustained period. It's one thing to do it when there is a boom, but it seems much of the profit then gets wiped out by misconduct fines or impairment charges. (If memory serves, profit in the early 2010s was basically all wiped out.) They have, at least, built a decent level of capital up for their Core Tier 1.

Best wishes


Mark.

https://www.proactiveinvestors.co.uk/co ... 06109.html

At least their pensioners should be ok!

Recent improvements to British banks’ pension funds will mean significantly higher shareholder returns over the next four years, according to RBC Capital Markets. Almost all major UK banks are fully financed for their defined benefit schemes, with Lloyds Banking Group PLC (LSE:LLOY) at 97% the only main bank with a deficit, the Canadian bank estimates.

( the article title specifically mentions BARC & LLOY although it is more a sector comment).

ADrunkenMarcus wrote:It does make you wonder if BARC and its peers can actually make an acceptable return above the cost of capital over a sustained period. It's one thing to do it when there is a boom, but it seems much of the profit then gets wiped out by misconduct fines or impairment charges. (If memory serves, profit in the early 2010s was basically all wiped out.) They have, at least, built a decent level of capital up for their Core Tier 1.

Best wishes


Mark.

"If it's not one thing then it's another!"...or "I blame the management!"

Do banks attract a certain type of senior management suffering from OBN ( old boys network)?

A reckless culture playing with someone else's money ? I just wonder what future horror stories will unfold if Big Bang 2 ( Hunt) goes ahead?

There you go, I used the "C" word (" Architecture" was the word used in the US).

https://www.theguardian.com/business/20 ... in-profits

"The bank revealed in its annual report on Wednesday that its staff bonus pool would go relatively untouched, with top performers to share £1.2bn between themselves for their work in 2022"

From previous posting

""The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion over the course of 2022."

Hmmmm! Drat, they could have awarded themselves £2.8bn if only they hadn't co cked up!

Sadly I still have my holding, continuing to hope that eventually the company will be run for the benefit of shareholders rather than simply be a vehicle for executives to enrich themselves. The Amanda Staveley court case illustrated what sh)ts people like Roger Jenkins were. There was the occasional traditional principled banker, like Varley, but they were a dying breed.

Future commencement of share buy-back programme.

Barclays PLC (the "Company") announces that, as outlined in its announcement on 15 February 2023, it will commence a share buy-back programme to purchase ordinary shares of 25 pence each in the Company ("Ordinary Shares") for up to a maximum consideration of £500m (the "Buy-back"). The Buy-back will commence on 13 March 2023 and end no later than 15 August 2023 (subject to regulatory approval remaining in place). The purpose of the Buy-back is to reduce the share capital of the Company and therefore Ordinary Shares purchased under the Buy-back will be cancelled.

https://www.investegate.co.uk/barclays- ... 30010716Q/

Ian (No holding).

monabri wrote:No holding in Barc but interested because of holding shares in Lloyds & HSBC banks. Is this a sectorial problem or company specific? My initial thoughts are that, in some part, it is the latter.....

https://www.cnbc.com/2023/02/15/barclay ... under.html

"The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion over the course of 2022."

"Wednesday reported a full-year net profit of £5.023 billion ($6.07 billion) for 2022, beating consensus expectations of £4.95 billion but suffering a 19% fall from the previous year’s restated £6.2 billion in part due to a costly trading blunder in the U.S.

Fourth-quarter attributable profit was £1.04 billion, above analyst projections of £833.29 million but down 4% from the £1.08 billion posted in the fourth quarter of 2021."

https://www.reuters.com/business/financ ... 023-02-15/

"Returns on equity booked by the international unit which houses Barclays' transatlantic investment bank fell to 10.2% from 14.4% a year earlier, as fees from advising on debt and equity fundraising plunged by almost two-fifths year on year."


Worryingly for the UK banks (same link to Reuters article as above).

"Barclays' results were further marred by 1.2 billion pounds in credit impairment charges as Britain's economy continued to slow."

Lloyds down 2.3% v HSBA down 0.6% (noise) reflecting their respective focus on UK for profits.

Thanks monabri. Pretty bullish picture IMO so have added to my Barclays position. Meanwhile the buyback program later in the year will be a good opportunity to reduce some of my margined bets on the company if the price has risen nicely, looking for 220p+.

GS

The current dividend yield is 4.2% and would be 7.6% or so if they’d devoted the capital spent on buybacks to dividends as well. I don’t think you buy purely for dividends but buybacks do make sense st a distressed valuation.

Held 1998 (242p) to 2018 (201p IIRC)

Best wishes


Mark

Worth a read IMO:

Over the past ten years, conduct and litigation have cost the bank £18 billion. Aggregate pre-tax income over the same decade has been £45 billion (and dividend payments £8 billion), which may be enough to persuade shareholders to ponder what might have been.

Imagine how much that would have been in dividends - they could have paid more than double to shareholders. Or they could have done share buybacks at a significant discount to NAV per share and reduced the share count substantially, offsetting much of the 2008 and 2013 dilution.

Of course, they might have allocated it to bonkers bonuses.

https://www.ajbell.co.uk/articles/inves ... -are-cheap

Best wishes


Mark.

That graph of litigation costs v profit.... I'm lost for words. How are they allowed to continue trading?

Update regarding Chief Executive Officer.

Further to the announcement on 28 November 2022, Barclays PLC and Barclays Bank PLC ("Barclays") is pleased to announce that its CEO, C.S. Venkatakrishnan, has completed the treatment for Non-Hodgkin Lymphoma and is now in remission. His letter to colleagues on this subject is below:

"Dear Colleagues,

I am pleased to inform you that I have completed the treatment for Non-Hodgkin Lymphoma that I commenced last November. I am now in remission (no evidence of disease). Over the coming weeks, I plan to be working more from the office, and ultimately resuming travel.

I am very grateful for the care I have received, using the Memorial Sloan Kettering Cancer Centre's program available to all US employees. Equally, I wish to thank you for your thoughts, prayers, and kind notes.

As always, I encourage you to pay close attention to your physical and mental wellbeing. If you or eligible members of your family have been diagnosed with cancer, please do make use of the support we provide to employees worldwide."

https://www.investegate.co.uk/barclays- ... 00018670R/

Ian (No holding).

Commencement of Share Buyback Programme.

Barclays PLC (the "Company") announces that, as outlined in its announcement on 27 July 2023, it will commence a share buy-back programme to purchase ordinary shares of 25 pence each in the Company ("Ordinary Shares") for up to a maximum consideration of £750m (the "Buy-back"). The Buy-back will commence on 28 July 2023 and end no later than 27 January 2024 (subject to regulatory approval remaining in place). The purpose of the Buy-back is to reduce the share capital of the Company and therefore Ordinary Shares purchased under the Buy-back will be cancelled.

https://www.investegate.co.uk/announcem ... me/7661154

Ian (No holding).

Decision Notice issued by RDC regarding former CEO.

https://www.investegate.co.uk/announcem ... eo/7812648

NB. Due to the sensitive nature of this matter (imho) I elected to not provide a quote of the text in the above link in this post here on TLF. I hope I'm right to have not provided such a quote?

Ian (No holding).

Ian,

Thank you for reporting your own post. I don't think slander or libel are issues here. That said, it's not particularly relevant: he is by now very much the former CEO, and the sums involved are minuscule in terms of Barclays' overall finances.

MDW1954