Barclays jumps 6% after announcing a major strategic reform

For the full year, net attributable profit was £4.27bn, down from £5.023bn in 2022 and below consensus expectations of £4.59bn.

The bank also announced an additional share buyback worth ₹1 billion, and will establish a new three-year plan aimed at improving operational and financial performance, CEO CS Venkatakrishnan said in a statement.

Barclays took a £900m loss in the fourth quarter from structural cost-cutting measures, which are expected to result in overall cost savings of around £500m this year, with an expected recovery period of less than two years.

Here are some other highlights:

• Group revenue in the fourth quarter was £5.6 billion, down 3% on the same period last year.
• Credit impairment charges were £552 million, up from £498 million in Q4 2022.
• The Tier 1 capital ratio (CET1), a measure of the bank's financial strength, was 13.8%, down from 14% in the previous quarter.
• Return on tangible equity for the full year was 10.6% excluding restructuring costs in the fourth quarter. Return on equity in the fourth quarter was 5.1%, down from 8.9% in the fourth quarter of 2022.
• Total quarterly operating expenses were almost unchanged year-on-year at £4bn.

Momentum at Barclays' traditionally strong corporate and investment bank – particularly in its fixed income, currency and commodities trading division – has waned in 2023, as market volatility moderates.

The bank on Tuesday announced a massive operational overhaul, including significant cost cuts, asset sales and a reorganization of business divisions, while promising to return £10bn to shareholders between 2024 and 2026 through dividends and share buybacks.

The business will now be divided into five operating divisions, separating the corporate and investment bank, namely: Barclays UK Corporate Bank, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank and Barclays US Consumer Bank.

“This rezoning will provide enhanced and more detailed disclosure of the performance of each of these operating divisions, along with greater accountability from an operational and management standpoint,” the bank said in its report.

Barclays is targeting total cost savings of £2 billion and a return on equity of more than 12% by 2026.

This is a breaking news story and will be updated soon.