Strong but unsustainable results

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.

Strong operating performance offset by increased litigation charges

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.

Trading and interest rate tailwinds

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 misfortune of some is the happiness of others

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.

Confirmed 10% RoTE guidance

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.

Unexpected but prepared CEO replacement

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.

Ongoing record revenue generation and benign cost of risk

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.

Provision releases and equity adjustments boost

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.

Earnings surprise offset by negative equity adjustments

Like many other UK banks, the earnings surprise was offset by negative equity adjustments. The top line continued to enjoy supportive CIB activities which offset the ongoing impact of the pandemic on the consumer finance business. The earnings surprise could have proved to be stronger if the group had decided to recover all the excess provisioning.

Stronger profits offset by large negative equity adjustments

The lockdowns’ impact on consumer spending was mitigated by robust mortgage activity and, above all, strong investment banking businesses supported by ongoing supportive market conditions and market share gains in both FICC and equities. This year, the extent of the profitability recovery will largely depend on the pace at which the cost of risk will normalise.

Sharp reduction in provisioning build-up

As expected following the US banks’ releases, Barclays’ third quarter results saw a sharp reduction in provisions build-up while the emergence of delinquencies has been delayed by the State’s supporting measures. Management continues to expect a reduction in the cost of risk next year. It remains to be seen if this guidance is capable of withstanding new lockdowns or a no-deal Brexit.

Stable 4Q22

LIBERUM: Trident Royalties* - Record quarterly receipts

Top Picks for 2023 - 2022 review and outlook for 2023

On 10 January last year, we set out our ten top stock picks for 2022, in what turned out to be a very poor twelve months for global equities, due to war, accelerating inflation, political instability and recession fears. Between 7 January 2022 and 31 December 2022, the AIM All-Share Index declined 30.0%, whilst the average performance of our ten top picks was -24.7%, a modest relative outperformance. In this note we discuss the performance of our 2022 top picks, equities trends in 2022, and our

LIBERUM: Trident Royalties* - General Motors invests in Thacker Pass

QuotedData’s Real Estate Monthly Roundup – January 2023

Performance - 2022 ended with another difficult month for property companies as the sector continues to get to grips with the impact of higher interest rates. There were several funds that performed well during December, however, with secondary shopping centre landlord Capital & Regional top of the pile. For a second month on the trot Home REIT saw its share price tank after it came under attack from a short seller in November. Valuation moves - It was a mixed bag for valuations, with six-month

FY22 TU – Strong Upgrades on Better Performance

Argentex has issued a trading update for the 9M22 period this morning, with revenue and earnings performance ahead of expectations. FY22 revenues are up 54% yoy to £50.4m (+7.5% vs. SCM estimates) and operating margins are ahead of management expectations. This was driven by growth in the number of corporate clients as well as good progress across its growth strategy, with robust trading across all products and geographies. Another strong update from Argentex, as the Group continues to deliver o

Cenkos; Marlowe Plc -- Building the software offering

Marlowe hosted a well-attended CMD last week in which it provided a deep dive into its burgeoning software business, which from a standing start in 2018, has grown to represent c25% of group Adj EBITDA today, driven by a combination of targeted acquisitions and strong organic growth (mid-high teens in FY22A). Multiple macro drivers underpin growth in the global GRC market, which is expanding at a c8% CAGR. With the share price having nearly halved over the past 12-months, Marlowe now trades mate

Hybridan Small Cap Feast - 17 Jan 23

17 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

FLASH: FY22 pre-close indicates profit beat

Morning Note – 31 January 2023

Q4 Activities Update

Trident Royalties Plc (AIM: TRR) has, this morning, provided an update on its activities undertaken during the quarter ended 31 December 2022. In terms of royalty receipts it has been the best quarter since inception. QoQ revenues increased 46% to US$3.5m (9x YoY). Each royalty either met or exceeded our forecasts with Koolyanobbing 52% ahead. The gold offtake portfolio was slightly above our forecast.

Hybridan Small Cap Feast - 23 Jan 23

23 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Hybridan Small Cap Feast - 19 Jan 23

19 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Belvoir Group - Resilient and diverse business model supports long-term value

Belvoir’s FY 2022 year-end statement details a resilient performance against lower activity levels in the housing market and the high degree of uncertainty that the Autumn mini budget created. We have upgraded our FY 2022E EPS by +2% and now forecast a decline of less than -10% against the very strong 2021 comparative. The recurring lettings revenue accounts for c.56% of Group gross profit and is supported by rising rents. Rents on new tenancies were up +10.8% during the year and will progressiv

Portfolio update – good progress & new investment

AUGM has published a portfolio update this morning, including the news of the Group having led a funding round into Berlin-based cyber insurance platform Baobab (3m investment), bringing the Groups portfolio to 25 investee companies. AUGM continues to significant growth potential within its portfolio, despite a more challenging macro-backdrop, with its top 5 portfolio companies having generated an average 102% yoy growth rate. Overall a positive update with good progress across key investments.