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.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Trading around Brexit

Find out how the UK’s exit from the EU continues to affect traders, and discover:

  • The unique opportunities in a ‘hard’ and ‘soft’ Brexit
  • The markets you should be watching
  • Everything that’s happened so far

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.