HomeInvestingEarningsBarclays' yearly net profit falls 19%, shares down 8%

Barclays’ yearly net profit falls 19%, shares down 8%

Barclays announced a full-year net profit of £5.023 billion ($6.07 billion) for 2022, above consensus estimates of £4.95 billion but down 19% from the previous year’s restated £6.2 billion, owing in part to a costly trading error in the United States.

The fourth-quarter attributable profit was £1.04 billion, up from the £833.29 million predicted by analysts but down 4% from the £1.08 billion reported in the fourth quarter of 2021.

Here are some further financial highlights:

  • The common equity tier one (CET1) ratio was 13.9%, down from 13.8% in the previous quarter and 15.1% in the fourth quarter of 2021.
  • The fourth-quarter return on tangible equity (ROTE) was 8.9%, compared to 12.5% in the third quarter and 13.4% in the fourth quarter of 2021. ROTE was 10.4% throughout the entire year.
  • The full-year net interest margin (NIM) was 2.86%, compared to 2.52% at the end of 2021.
  • Credit impairment provisions were £1.2 billion, compared to a £700 million charge in 2021.

The British lender was struck hard by an over-issuance of securities in the United States, which culminated in litigation and conduct costs totaling £1.6 billion by 2022.

Early last year, the British bank reported that it had sold $15.2 billion more in US financial instruments known as structured notes than it was entitled to.

Over the course of 2022, Barclays recorded a net attributable loss of roughly £600 million related to the problem, including a monetary penalty of $200 million as a result of a probe by the US Securities and Exchange Commission.

C.S. Venkatakrishnan, CEO of Barclays, stated on Wednesday that the company performed “strongly” in 2022.

“Each business delivered income growth, with group income up 14%.” “We achieved our RoTE target of over 10%, maintained a strong common equity tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders,” he said.

“We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”

Return on equity at the international segment, which includes Barclays’ investment bank, fell to 10.2% for the full year from 14.4% in 2021 and to 6.4% in the fourth quarter from 9.9% in the same quarter the previous year. Profits in corporate and investment banking fell as well.

Barclays declared a total dividend of 7.25 pence per share for 2022, up from 6 pence in 2021, including a full-year dividend of 5 pence per share. The bank also aims to commence a £500 million share repurchase, bringing the total buybacks planned for 2022 to £1 billion with a total capital return of roughly 13.4 pence per share.

Barclays shares plunged more than 8% immediately after the London market opened.

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