Barclays Announces Slight Increase in Profit
Barclays PLC (NYSE:BCS), on Monday announced a 7 percent rise in the third fiscal quarter earnings. The company also said that it does not feel the need to issue new stocks and expects to meet its long term earnings goals.
The net earnings rose to 2.65 billion pounds ($4.27 billion) in the third quarter compared to 2.48 billion pounds earned a year earlier and helped by the accounting gains, the profits made in favor of the bank’s debt.
Pretax profit of the bank exceed expectations by increasing 5 percent to 1.34 billion pounds, with falling debts and better performance of Barclays retail banking unit. The 1.3 billion pounds accounted in gains for the decreasing value of the debt that the bank had invested in and other onetime items. Barclays reduced its share in BlackRock Inc, a U.S fund manager by 1.8 billion pounds following the fall in BlackRock’s share prices.
A 15 percent revenue decline was reported by Barclays in the investment banking division, the bank’s majority earnings driver. Revenue at Barclay’s capital dropped to 2.25 billion pounds compared to 2.65 billion pounds a year ago. These revenue declines were made to make up for the rises in the United States, African and European retail banking revenue, a few terrible loans in those sectors.
Bob Diamond, Chief Executive Officer for Barclays said that the banks results so far portray the continued progress towards the bank’s 2013 targets through building momentum across corporate and retail banking business and strong performance by Barclays Capital under thorny market conditions. Mr. Diamond added that Barclays will continue to generate enough capital for business needs and has no intensions to issue new shares to equity.
According to analysts the bank could fall short of one target to produce a 13 percent return on equity target by the year 2013, as regulatory charges increase and investment banking quantity remains skeletal from a weak economy worldwide.
Under European Union bank recapitalization plans announced last week, Barclays along with its other major United Kingdom peers does not need any extra capital. However, Barclays and other banks are setting goals to reduce their balance sheets and strip out assets linked to intensive capital and business lines to meet the terms of forecasted international regulations known as Basel III. Barclays follows other Wall Street Banks such as BoA, Goldman Sachs, CitiGroup and JPMorgan, who have all announced mixed results.
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht. |