Tue, 18th Jun 2019
Barclays Bank rose to the top of the FTSE 100 on Wednesday thanks to the announcement of a better-than-forecast first half. The bank shrugged off concerns about a fall in investment banking and provisions regarding the mis-selling of insurance.
Barclays shares rose by 3.2% to 226.1p after the bank reported a seven percent fall in pre-tax profits for the six months leading up to the end of June. Analysts had expected a much worse report. The bank attributes the gains to strength in the retail sector and the Barclaycard business.
The bank announced that it had plans to restructure its investment banking division, and that it would shed 7,000 jobs. It also plans to create a "bad bank" which would house its underperforming assets.
Andrew Coombs at Citi issued a buy rating for the stock, setting a target price of 300p, and stated that he expected to see the negative earnings momentum reverse in the second half, in spite of the ongoing litigation concerns.
Banks as a whole closed higher thanks to this report. The Royal Bank of Scotland gained 0.7 percent, while Lloyds Banking Group added 0.3 percent. The FTSE 100 index, however, dropped by 14 points to 6,793.11 - a fall of 0.2 percent thanks to difficulties in the mining sector, as well as a poor performance by ITV. The broadcaster shed 2.1 percent in spite of reporting increased half-yearly profits thanks to the World Cup. The fall was attributed to profit taking by investors after the shares rose almost 18 percent in the last month.