Barclays Q4 Report and Full-Year Profits
In Barclays Q4 report, the finance company reported a net profit of £220 million ($307 million), drastically beating out analyst expectations. Most experts in the industry were projecting a Q4 loss from the company of £44.88 million ($62.64 million), pointing due to a jump in impairment charges brought on by economic hardship in the UK. Because of the company adding to profits in Q4, Barclays was able to report a full-year profit of £1.53 billion ($2.13 billion). While business did decline in 2020, pushing profits down 38% from 2019, the company posting large profits at all is considered a major success.
The major points of success over the course of the year for the business largely came from the corporate and investment banking, responsible for £12.5 billion ($17.45 billion) in net income over the course of the year. In fact, this income marks a 22% increase from 2019.
Due to the relative success of business over 2020, the company also announced that they would once again resume dividend payments to shareholders alongside a plan for £700 million ($977.15 million) worth of stock buybacks. The dividend payments will be 1 pence per share.
In a statement accompanying the Barclays Q4 report on the relative success of 2020 and the optimism for 2021, CEO of the business, James E. Staley, said, “Barclays remains well capitalised, well provisioned for impairments, highly liquid, with a strong balance sheet, and competitive market positions across the Group. We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021.”
Barclays Outlook for 2021 and Stock Market Response
While no specific guidance was provided by Barclays, the business appears to be optimistic about 2021. However, many analysts are far more worried about the future due to several factors currently at play. Due to the pandemic, many customers of the business have taken out significantly less credit, lowering margins in Barclays’s retail arm. At the same time, the UK economy is still on incredibly shaky ground as national lockdowns because of the pandemic have completely shuttered a large portion of active businesses.
The result of this anxiety from analysts is a drop in Barclays stock of slightly over 4%. While numbers from the year were strong, the future of British banking and lending remains pessimistic until vaccine rollout around the nation begins to spur a genuine economic recovery. Barclays will continue to feel the effects of the pandemic on earnings through at least Q1 of the 2021 fiscal year.
About the Author
Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.