Barclays 2018 results: share price seesaws as full-year profit misses forecasts
The UK lender reported full-year profit of £1.4 billion, helping the bank to end 2018 firmly in the black and bounce back after suffering losses a year prior, but Brexit remains a key concern this quarter.
Barclays reported full-year profit of £1.4 billion in 2018 on Thursday, seeing the bank swing back into the black after suffering significant losses in its previous fiscal year of £1.92 billion.
However, despite a relatively strong end to the year, Barclays recorded group profit of £3.5 billion, falling short of analysts’ forecasts.
The lender also used its recent trading update to announce that it will take allocate around £150 million aside to act as a Brexit buffer and reiterated its commitment to the UK as a British bank.
Barclays results: key figures
Barclays group profit before tax came in at £3.5 billion, which is inline with how the bank performed in the previous fiscal year. Meanwhile, its UK business saw profit increase to £2 billion, up from £1.7 billion in 2017, driven by lower interest margins and strong balance sheet growth.
‘2018 represented a very significant period for Barclays,’ Barclays Group CEO Jes Staley said. ‘In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started to see the earnings potential of the bank, as the strategy we have implemented began to deliver.’
‘This was evident in the improved performance across the Group compared to 2017,’ he added.
Barclays shaky share price amid UK economic uncertainty
The bank’s share price edged higher on Thursday morning following its full-year results, only for its gains to be eroded later on as investors grow increasingly weary of the impact Brexit will have on UK financial services.
The bank’s share price climbed as much as 4.3% on Thursday morning, but those gains were short-lived with the stock seeing its share price slump as trading continued.
Barclays confirms 6.5p dividend and pledges to return earnings to shareholders
The bank’s share price performance is a surprise considering the lender used its recent trading update to announce that it plans to return a greater proportion of its earnings to shareholder via share buybacks.
Barclays also confirmed that it will pay a 6.5p dividend to shareholders and announced that earnings per share was 21.9p in 2018.
‘Earnings per share excluding litigation and conduct for the full year was 21.9p,’ Staley said. ‘Our CET1 capital ratio of 13.2% is at our target of around 13%, and we have grown tangible book value for three quarters in a row.’
‘We will use the strong capital generation of the bank to return a greater proportion of those earnings to shareholders by way of dividends and to supplement those dividends with additional returns, including share buybacks,’ he added.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Trading around Brexit
Find out how Britan’s EU exit continues to affect traders, and discover:
- How you can trade on Brexit
- The markets you should be watching
- Brexit trading strategies for key assets
Live prices on most popular markets