Barclays PLC – Q2 2016 Results Reaction

Barclays PLC – LON:BARC
Share Price – £1.56
Market cap – £26.8bn

Barclays announced Q2 results yesterday and broadly speaking my expectations were met, with management meeting their own guidance.

  • Core RoTE of 11%
  • CET1 ratio increased to 11.6%
  • Tangible book value up to £2.89
  • Cost/income ratio down to 65%

With the share price still near 52 week lows, it seems the market as a whole isn’t convinced at the turnaround. For me, the market still has an overly pessimistic view of Barclays. Management are 1/4 of the way through their restructuring plan, and are on track to meet their targets. Vigilance is required though, as my original estimate for roughly £5bn in core earnings in a clean year has slipped slightly to about £4.7bn. For now, I am happy to take advantage of the volatility in the market to buy stock at around a 50% discount to tangible book value.

2 thoughts on “Barclays PLC – Q2 2016 Results Reaction

  1. bailey

    why even go near this POS? I held for 5 years and all this garbage had going for it was the divi, useless CEO cut that and gave themselves big fat bonuses

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  2. admin Post author

    Thanks for the response.

    Barclays clearly has hair on it and has been a source of deep distress to investors since the financial crash. Indeed, to this day the bank is still paying litigation and fines associated with actions taken nearly a decade ago. The important thing to be aware of is that most of what has happened is now in the rear-view mirror; the problem is investors have been so scarred they just can’t see this. Objectively speaking, the Barclays of today is much tighter, has retained their best businesses, while disposing of the loss-making parts. As long as the story continues to play out as expected, then investors will eventually recognise this.

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