Why Barclays Shares Are Sliding Today

Barclays PLC BCS shares are trading lower by around 4% after the company reported Q2 2023 results.

Total income fell 6% Y/Y to £6.3 billion in the quarter.

The company witnessed growth in Barclays UK income (+14% Y/Y) while a decline in Barclays International (-13% Y/Y).

Operating expenses rose 21% Y/Y at £4.0 billion.

Credit impairment charges stood at £0.4 billion. 

Attributable profit rose 24% Y/Y to £1.3 billion, with a return on tangible equity of 11.4%.

CET1 ratio came in at 13.8% vs. 13.6% a year ago.

At amortised cost, loans and advances stood at £401.4 billion, and deposits were £554.7 billion at the end of Q2 2023.

"We have positioned Barclays carefully for this mixed macroeconomic environment and delivered a consistent performance in the second quarter. Through our diverse sources of income, prudent risk management, and ongoing cost discipline we have again demonstrated the stability and strength of the franchise we have built over many years. This means we are able to distribute increased capital returns to shareholders, while providing targeted support to our customers and clients. Looking forward we are very confident of meeting our targets for the full year,” said C. S. Venkatakrishnan, CEO.

BCS disclosed H1 2023 dividend of 2.7p and a share buyback worth £750 million.

Outlook: For 2023, BCS continues to expect loan loss rate of 50-60bps in 2023 and return on tangible equity of above 10%. 

The company now expects net interest margin in Barclays UK to be less than 3.20%, with a current view of around 3.15%

The bank continues to expect the Common Equity Tier 1 ratio to be within 13%-14% in the medium term.

Price Action: BCS shares are down by 4.19% at $8.24 premarket on the last check Thursday.