- ORIGINAL NEWS
Barclays shares up 4% as bank swings back to profit in first quarter amid strategic overhaul
- SUMMARY
Barclays, a prominent British bank, has rebounded from a recent loss to post a significant profit of £1.55 billion ($1.93 billion) in the first quarter of 2024.
This surpasses analyst expectations of £1.29 billion.
The bank’s performance was boosted by a surge in its revenue, which reached £6.95 billion.
Despite this, pre-tax profits declined by 12% due to an ongoing operational overhaul aimed at enhancing efficiency and reducing costs.
This restructuring plan, which began in the fourth quarter of 2023, has resulted in structural cost-cutting measures leading to a £900 million hit.
However, the bank anticipates substantial cost savings of £500 million in 2024, with a payback period of less than two years.
Barclays’ strategic revamp involves reorganizing its business into five operating divisions, separating its corporate and investment bank.
Additionally, the bank plans to return £10 billion to shareholders through dividends and share buybacks from 2024 to 2026.
Analysts see the bank’s first-quarter results as a positive sign, signaling its commitment to its overhaul plans.
Barclays aims to achieve a return on tangible equity (RoTE) of over 10% in 2024 and over 12% in 2026.
This demonstrates the bank’s consistent ambitions despite previous challenges.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Barclays reported a net loss of £111 million in the fourth quarter of 2023 due to an operational shake-up designed to reduce costs and improve efficiencies.”
“Shares of Barclays rose 4% on Thursday after the bank reported first-quarter net income attributable to shareholders of £1.55 billion ($1.93 billion), beating expectations and returning the British lender to profit amid a major strategic overhaul.”
“Pre-tax profits, however, were down 12% to £2.28 billion from $2.6 billion a year earlier, as the bank braces to implement its extensive revamp plans.”
Negative