On Thursday, Barclays posted a full-year profit of 3 1.53 billion (2. 2.11 billion) for 2020, down 38% from 2019 but exceeding analyst expectations.
The British lender attributed its fourth quarter net profit to 220 million shareholders, despite the UK taking new nationwide lockout measures amid the resurgence of Covid-19.
Strong performance in corporate and investment banks, with full-year revenues rising 22% to .5 12.5 billion, has offset a sharp line in losses as a result of the economic outlook developed by the epidemic.
Analysts surveyed by Refinitive had expected a net loss of 44 44.88 million in the fourth quarter, bringing the full-year net profit to 1.22 billion.
Barclays CEO Jess Staley told CNBC’s “Squawk Europe v Europe” on Thursday that the UK economy would be demanded to be unlocked later in the year.
“The UK consumer has clearly seen a significant reduction in costs against the epidemic, but the same token has been used to strengthen a person’s balance sheets, especially by increasing their deposits, and we feel that on our balance sheet,” Staley said. Said. .
“You have to believe that once the epidemic is behind us, those deposits represent costs, and we’ll see hope in economic activity in the second half of this year.”
The final earnings report for 2020 stepped into a surprisingly strong third quarter with the bank posting a net profit of 11 611 million.
The full-year profit for the previous year came in at 2. 2.46 billion, with a fourth-quarter profit of 68 681 million in 2019.
Other highlights:
- The general equity tier one capital (CET1) ratio has reached an all-time high of 15.1%, Up 14.6% at the end of the third quarter.
- The return on tangible equity (RTTE) was 2.7%, up from 1.1% in the previous quarter.
- Net interest margin (NIM), down from 3.09% at the end of 2019, was 2.61%.
- The full-year credit deficit charge has reached £ 4.8 billion, compared to 1.9 billion in 2019.
- Pre-tax profit for the full year was 3.1 billion, up from £ 4.4 billion in 2019.
Dividend payment
Barclays also announced that it would resume dividend payments to shareholders of one pence per share and enter into a £ 700 million share buyback. The Bank of England last year requested that British lenders suspend payments to shareholders.
Addressing the decline in RTTE, Staley said that due to the diversified business model implemented five years ago, the bank has been able to remain profitable in every quarter of 2020, with the investment bank responding differently to the consumer banking segment.
“When our consumer bank struggled and brought that profitability down, largely because we charged a significant weakness to make reserves, the investment bank actually returned more than 13% of the capital in a year, so it made the bank profitable.” Every quarter, ”he said.
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