Barclays on Thursday reported full-year profit of £ 1.53 billion ($ 2.11 billion) for 2020, down 38% from 2019 but exceeding analysts ’expectations.
The British lender posted net profit in the fourth quarter against shareholders of £ 220 million, despite the UK launching new lock-in measures across the country amid the Covid-19 resurgence.
Strong performance in the corporate and investment bank, which saw full-year revenue rise by 22% to £ 12.5 billion, offset a sharp decline in discount costs due to the changing economic outlook. ‘decline with the pandemic.
Analysts surveyed by Refinitiv expected a fourth-quarter net loss of £ 44.88 million to realize full-year net profit of £ 1.22 billion.
Barclays CEO Jes Staley told CNBC’s “Squawk Box Europe” on Thursday that there would be strong demand in the UK economy to be released later in the year.
“It is clear that the UK consumer against pandemic has significantly reduced consumption, but with the same indication, has invested in strengthening individuals’ balance sheets, especially by growing their investments, and we feel that on our balance, “Staley said.
“You have to believe that, once the epidemic is behind us, these investments represent an uptrend, and we will see that in economic activity hopefully in the second half of this year. “
The last earnings report in 2020 came after a remarkably strong third quarter in which the bank recorded a net profit of £ 611 million.
Full year profit in the previous year came in at £ 2.46 billion with a 2019 fourth quarter profit of £ 681 million.
Other key events:
- The capital ratio of one capital rate (CET1) reached a peak of 15.1%, up from 14.6% at the end of the third quarter.
- The result on equity equity (RoTE) was 3.2%, down from 5.1% in the previous quarter.
- Net flat margins (NIM) were at 2.61%, down from 3.09% at the end of 2019.
- Credit loss costs for the full year reached £ 4.8 billion, compared to £ 1.9 billion in 2019.
- Full year profit before tax was £ 3.1 billion, down from £ 4.4 billion in 2019.
Divorce payments
Barclays also announced that it would begin share payments to shareholders of one pence per share and begin to purchase an installment of £ 700 million. The Bank of England last year called for British lenders to suspend payments to shareholders.
Addressing the downturn in RoTE, Staley said the bank was able to remain profitable in all quarters of 2020 as a result of the diversified business model implemented five years ago, with the investment bank treat the consumer banking sector differently.
“While our consumer bank struggled and brought down that profit, largely because we incurred huge blockchain costs to build a reserve, the investment bank had received a capital return in the year. of more than 13%, so that has kept the bank profitable quarterly, “he said.