Will Barclays shares mount a recovery after cost-cutting campaign?

The UK banking and investment titan Barclays is continuing to perform poorly on the market, with its share price falling 7% over the course of June. Amid a major cost-cutting exercise, will the Barclays share price recover?

  • Barclay's shares have fallen 7% in June
  • Barclays is currently scaling back services
  • Targeted expansion is also underway in selected areas
  • Ready to trade the Barclays share price? Open an account today

Why is Barclays' share price slumping?

The UK banking and investment titan Barclays saw its price fall further by another 2.5% during early morning trading on 30 June to 169.32p, its lowest point in almost two months. This follows a bearish month for the stock, during which the Barclays share price has fallen by 7%.

This is broadly in line with the share price performance of many of its competitors throughout June. For example, the London-listed HSBC has seen its share price drop by 6% since 1 June, while Lloyds has seen a 7% drop when its price reached the lows of 46.15p this month.

Some of this is the result of issues that have hit UK banking giants equally in recent weeks. This is such as low demand for credit cards and consumer loans in the UK, low interest rates, and the extension of lockdown restrictions concerning Covid-19 and concerns over the Delta variant. However, some issues are more specific to Barclays.

How is Barclays trying to improve its outlook?

Barclays has clearly been pushing to make cost efficiencies in some areas while committing to targeted expansion in others. These are efforts that come on the back of some unforeseen major expenses for the company, such as the £48 million that the FCA forced Barclays to pay back to customers on 18 June who were mis-sold timeshare loans in Malta.

Many of the cuts undertaken by Barclays in recent weeks concern its services. For example, on 22 June the company axed current account discounts for all 17 million of its customers, citing a poor uptake of the service.

Meanwhile, Barclays also announced on the morning of 30 June that it would be moving its staff from its corporate and investment bank office into its main headquarters in an apparent cost-cutting exercise and a long-term review of its real estate footprint due to an increase of home working due to Covid-19.

On the flipside, Barclays is making moves to strengthen its investment banking arm with new staff, having just poached Burcu Korkut, former head of emerging markets at Credit Suisse, to head up the EMEA macro sales division. Although much of Barclays' future fortunes will be tied to factors such as interest rates and credit card demand, could these lower-level moves succeed in making the company leaner and more resilient?

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