Why British Banking Giant Barclays Shares Are Surging Premarket Tuesday

Barclays PLC BCS shares are surging premarket Tuesday after it reported fourth-quarter FY23 results.

Total income fell 3% Y/Y to £5.6 billion in the quarter. The company reported an attributable loss of £0.1 billion (vs profit of £1.0 billion).

The company witnessed a decline in Barclays UK income (-9% Y/Y), with net interest income (NII) broadly flat and net fees, commissions, and other income down 41% due to one-off items and the transfer of Wealth Management & Investments (WM&I) to CC&P during the second-quarter FY23.

Meanwhile, Barclays International declined 3% Y/Y in the fourth quarter.

Operating expenses were £4.92 billion versus £4.00 billion a year ago. Credit impairment charges stood at £0.6 billion. CET1 ratio came in at 13.8% vs. 13.9% in FY22.

At amortized cost, loans and advances stood at £202.8 billion, and deposits were £241.1 billion at the end of 2023.

Starting with the first quarter of FY24, the British banking giant plans to report under five segments: Barclays UK, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays US Consumer Bank.

Also Read: Barclays Bets Big on Green Transition, Reportedly Turns Up the Heat on Oil & Gas Lending

Share Repurchase: Barclays initiated a further share buyback of up to £1 billion.

Outlook: Barclays projects NII excluding Barclays Investment Bank and Head Office Of £10.7 billion, of which Barclays UK NII of c. £6.1 billion in 2024.

Also, the bank anticipates RoTE greater than 10% and 10.5% excluding inorganic activity in 2024.

Barclays sees a total income of c. £30 billion in 2026 and plans to return at least £10 billion of capital to shareholders between 2024 and 2026, with a continued preference for buybacks. 

It targets gross efficiency savings of c. £1 billion in 2024 and c. £2 billion by 2026. Through its structural cost actions, the bank expects cost savings of £500 million in FY24, which includes headcount reduction.

Related: Barclays Plans To Cut Up To 2000 Jobs To Save Up To $1.25B: Report

The bank expects to maintain a Common Equity Tier 1 ratio outlook of 13%-14%.

Price Action: BCS shares are up 9.1% at $8.15 premarket on the last check Tuesday.

Photo via Wikimedia Commons