Barclays Profit Falls 14% and Shares on Track for Worst Day in 3 Years

Barclays, the
UK-based financial giant, has reported worse-than-expected 2022 financial results,
as regulatory fines and a slide in dealmaking fees negatively affected overall revenues.
The lender set aside £1.2 billion to cover potential loan losses.Barclays 2022 Report below
ExpectationsAccording
to the financial statement published on Wednesday, one of the biggest UK
lenders’ profit came in at £7 billion in 2022, falling significantly by 14%
year-over-year (YoY), despite rising interest rates and good performance of the <a href=”https://www.financemagnates.com/tag/fixed-income/” target=”_blank” rel=”follow”>fixed-income</a> trading department.However, Barclays
was hit hard by the reduction in dealmaking fees, which fell 39% YoY to £2.2
billion. Although it was one of the most minor declines compared to rival banks
in Europe and Wall Street, it still negatively impacted the final results,
which came in below analysts’ consensus. ”Barclays
performed strongly in 2022. Each business delivered income growth, with Group
income up 14%. We achieved our RoTE target of over 10%, maintained a strong
Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to
shareholders. We are cautious about global economic conditions, but continue to
see growth opportunities across our businesses through 2023,” C. S.
Venkatakrishnan, the Group Chief Executive, commented.While Barclays’
CEO believes that 2022 was a strong year for the Group, investors in the London
stock market have a completely different view.Watch the recent FMLS22 panel on constructing collaboration between fintech and banks.Barclays Falls 9% on LSEWednesday’s
session for Barclays shares on the London <a href=”https://www.financemagnates.com/terms/s/stock-exchange/” class=”terms__secondary-term” id=”76d5dc1c-865d-49be-9e84-126258dff377″ target=”_blank”>Stock Exchange</a> (<a href=”https://www.financemagnates.com/tag/barclays/” target=”_blank” rel=”follow”>LSE:BARC</a>) began with
a sharp downward gap. At the time of writing, shares in the lending giant are
losing 9.4% and trading at £169.8, which is the lowest in a month.If the
session closes at current levels, it could be the worst trading day for
Barclays since April 2020, almost three years ago. The bank’s shares have
rebounded from their October lows at £132 by nearly 50%, reaching a one-year
peak in early February. However, they have depreciated slightly since then,
with financial results drastically exacerbating the sell-off.Although,
not every financial metric in Barclays’ report looks negative. The
aforementioned fixed income department, which additionally includes currencies
and commodities (FICC), increased profits by 65%, performing far better than
rival <a href=”https://www.financemagnates.com/tag/goldman-sachs/” target=”_blank” rel=”follow”>Goldman Sachs</a> and Morgan Stanley, which reported growth in FICC trading of
38% and 20% YoY, respectively, in 2022.£1.6 Billion in Charges
for BarclaysThe
investment bank had to pay £1.6bn in penalties and restitution to clients this
year in relation to the over-selling of securities in the US. The firm has
decided to reduce the remuneration of top executives by a total of £1m due to
regulatory failings.In
September 2022, the <a href=”https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/” class=”terms__main-term” id=”3718b4df-fc5f-479a-861e-f52759439c15″ target=”_blank”>Securities and Exchange Commission (SEC</a>) announced that 15
broker-dealers and one affiliated investment adviser have agreed to pay
combined penalties of over $1.1 billion for their recordkeeping failures. The
charged firms included Barclays, Bank of America, Citigroup, Credit Suisse,
Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS. <a href=”https://www.financemagnates.com/institutional-forex/us-sec-penalizes-16-top-firms-over-11b-for-recordkeeping-failures/” target=”_blank” rel=”follow”>Barclays agreed to pay a penalty
of $125 million.
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