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The quarterly results were broadly in line with the consensus expectations despite the management’s late confirmation of the less-supportive environment for the investment bank business. Unfortunately, the management failed to properly communicate on the evolution of the net interest margin and the rationale for the restructuring, leading to a sanguine share price reaction.
Companies: Barclays PLC
AlphaValue
The second quarter earnings surprise was fully attributable to the unexpected and unsustainable cost of risk reduction which more than offset weaker CIB revenues. The UK Retail Banking and Consumer Finance revenues were also marginally weaker than expected translating into slightly downgraded net interest margin guidance.
The group posted a strong set of results. Although it is necessary to be fully sustainable, it has enabled the management to reiterate its full-year guidance. The deposits’ stability and the group’s liquidity are also welcomed as BARC has accumulated large excess deposits.
The group was heavily sanctioned for having failed to beat the market’s expectations, posting contrarian net interest margin attrition and warning of limited interest rate tailwinds ahead.
The group posted a strong but unsustainable set of results supported by trading and hedging gains. The CET1 ratio is getting closer to the group’s threshold but the gain will be fully reversed by the anticipated unwinding of the two controversial pension transactions spotted by the regulator last April.
Management’s reluctance to commit to precise short-term guidance signals that the strong first-half operating performance cannot be taken for granted. The return to a sustainable decent profitability level (above 10%) remains a distant objective as reminded by the management itself.
The group posted record, albeit partly unsustainable, quarterly results, supported by the trading activities, interest rates and ongoing provision recoveries. Although the coming quarters will see some normalisation, these results enabled the company to reiterate its full-year RoTE guidance.
The announced accident is not good advertising but belongs to an operating risk which is covered (and remunerated) with dedicated equity. We see no reason to over-interpret the block sale that followed the announcement. Based on the past correlation, we believe that the rapid rise in US rates should be strongly supportive for the stock. The recent share price underperformance provides a strong Buy opportunity in our view.
The quarterly performance was boosted by net provision releases and tax gains which partly offset seasonally lower revenues. Management did not commit to any precise guidance but reiterated its confidence in the group’s ability to maintain the RoTE above 10% over the medium term.
Mr Staley’s shock departure should not prove too disruptive for the group, in our view, as he leaves the group in good shape and in preferred hands.
The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.
The quarter enjoyed stronger-than-expected provision releases and a partial reversal of the first quarter negative equity adjustments, whereas the DTA remeasurement offset ongoing restructuring charges.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Barclays PLC. We currently have 0 research reports from 6 professional analysts.
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
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Hardman & Co
In the most difficult market conditions in more than a decade, Foxtons after adopting new strategic priorities, delivered an impressive turnaround in performance, and regained its position as London’s leading Estate Agent. Our analysis recognises the logic which underlies current consensus, see scope for upgrades and justifies valuations materially above current values.
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Today's announcement from JIM reflects a year which saw challenges both in underlying terms and in relation to the ongoing Section 166 process. Trading volumes have remained under pressure against a choppy economic backdrop. Voluntary requirement (VREQ) restrictions placed on “Model B” clients have led to a reduction in client numbers in this category, although numbers have remained stable since the Q3 completion of assessments. The company did benefit from rising interest rates, a significant p
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Edison
The new strategic vision set out by the CEO is gaining significant momentum, driven by investment in staff and in best-in-class bespoke IT and data platforms, and implies that medium-term targets are now coming into focus. Market share is being gained in all divisions, which is likely to be boosted if the sales market stabilises in 2024. We have modestly raised forecasts and our valuation to 132p/share and believe that if interest rates stabilise or ease further, there are upside risks to our fo
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ATT offers significantly discounted exposure to the technology sector…
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Kepler | Trust Intelligence
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HgCapital Trust (HgT) posted an 11.1% NAV total return in FY23 (based on final audited numbers), which allowed it to sustain strong five- and 10-year returns of 20.4% and 18.4% pa, respectively. This has been mostly driven by robust earnings momentum across its portfolio. HgT defied the tough private equity exit environment, generating £345.9m of total realisation proceeds excluding carried interest in FY23. Moreover, it has a healthy commitment coverage ratio of 73% (based on current pro forma
Companies: HGCapital Trust PLC
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