Barclays shares down after restructuring cuts

Posted by Simon Hadley in Banking on 4 March 2016 - Simon is a Credit Analyst at checkmyfile.

Barclays shares have dropped by 11% after the multinational lender announced plans to sell its African division, as well as slashing its dividend.

The bank has reported a 2% drop in pre-tax profits for 2015 and a financial dividend of 3.5p per share.

Jes Staley, Barclays chief executive, is hopeful that the bank will be able to cut its dividend by more than half by the end of 2017 in a bid to boost its capital. Barclays made £5.4bn in profit last year, down from £5.5bn in 2014.

Explaining the decision, Mr Staley says, “We're cutting the dividend for a very simple reason: We need to accelerate the closure of our non-core business. If we can get the majority of our non-core business, these are things like the Italian retail business which we sold recently or the US wealth management business that we sold recently.

“If we can close these transactions and just have Barclays illuminate the core franchise that we have as a transatlantic bank with a strong consumer franchise, corporate bank and investment bank, and let the profitability of that core business stand for itself, Barclays would be in a very good position.”

Barclays slide to a pre-tax loss of £1.9bn at the end of the last year, having previously took a significant hit of £1.45bn after being found guilty of mis-selling its customers payment protection insurance (PPI). Bonuses were also cut across the board for employees by 10% to £1.6bn.

The decision to pull out of Africa, where the bank has had an active division for over 100 years, has been a “very difficult” decision says Mr Staley, having described it as a “high quality franchise”.

Barclays Africa Group is currently one of the largest banks outside of the UK, employing 45,000 people over 12 countries including Ghana, Kenya and Uganda. Mr Staley has confirmed that the bank will be looking to sell its 62.3% stake in the next three years.

“You go to places like Uganda and Kenya and the brand of Barclays is as strong there as it is in the UK."But we have to make some very difficult decisions if we are going to get Barclays into focused, clear, compelling business model that generates returns for our shareholders," says Mr Staley.

Check Your Multi-Agency Credit Report

30 Day Free Trial

Final PPI claim deadline pushed back even further

Let’s be honest, we almost all know someone who has claimed for PPI. You may have even done it yourself. If you aren’t aware of anyone you know claiming for PPI, you would still know of its existence, as the adverts for claims firms seem to populate every TV channel and radio station with advertising space.

Published on 4 Jan 2017 by Ben Tumilty

Full Article

Banks not going far enough to combat fraud

Banks have been warned that they must start to do more to tackle scams where people are tricked into transferring money to a fraudster’s account. The Payment Systems Regulator (PSR) has stated this in a response to a “super complaint” lodged by the consumer group Which? but the Regulator did stop short of suggesting that the banks should compensate customers who had lost out.

Published on 21 Dec 2016 by Erika Bone

Full Article

Lloyds Acquire MBNA in £1.9bn Deal

Signalling a return to strength and in the organisation’s first acquisition since the 2008 global financial crisis when they purchased HBOS, Lloyds Bank is to buy credit card firm MBNA from Bank of America in a £1.9bn deal.

Published on 20 Dec 2016 by Tom Magor

Full Article

Mortgages through your mobile

Mobile bank provider Atom are launching the UK’s first mobile mortgage app. Applications for a mortgage often involve mountains of paperwork and Atom’s mortgage app is designed at reducing the volume of paperwork that applicants have to gather when applying for a mortgage.

Published on 8 Dec 2016 by Ben Ryland

Full Article

Compensation Scheme Limit Increases Due to Financial Uncertainty

The compensation limit for consumers who would lose out financially in the event of their bank collapsing has been increased back up to £85,000, which is where it was in July 2015.

Published on 23 Nov 2016 by Kevin Pearce

Full Article

Further Job cuts and Branch closures at Lloyds

The Lloyds Banking Groups is set to cut a further 665 jobs and close a further 49 branches as part of its continuing drive to cut costs.

Published on 14 Nov 2016 by Neil Greenhill

Full Article

Payday Loan Industry Contracts as Watchdog Bites

In the wake of a crackdown from the Financial Conduct Authority (FCA), the payday lending industry has drastically contracted, represented by a near 70% reduction in overall lending. To draw upon Russell Hamblin-Boone of the Consumer Finance Association, a mere 1.8m short term loans were issued over the course of 2015, compared to 10m in 2012.

Published on 9 Nov 2016 by Tom Magor

Full Article

Bank of England indicates massive increase in inflation for 2017

The Bank of England has reassessed its 2017 inflation forecast in the wake of Brexit and increased its prediction to triple the current rate of inflation. The UK’s central bank now expects the rate of inflation to reach 2.7% next year, whereas the current level stands at 1%.

Published on 7 Nov 2016 by Neil Greenhill

Full Article

Bank of England governor will extend stay until June 2019

Mark Carney will extend his tenure as the Bank of England Governor until June 2019, in order to guide the country through the Brexit negotiations.

Published on 1 Nov 2016 by Simon Hadley

Full Article

Digital only banks attract scepticism from UK consumers

Earlier this year, Atom became the first UK bank to operate solely through a mobile app. Based in Durham, it has only 30 staff and unlike much larger banks it has no branches or call centres – communication is conducted with its customers securely through a mobile app.

Published on 19 Oct 2016 by Tom Blandford

Full Article
keyboard_arrow_left

keyboard_arrow_right

We have loads of great customer reviews