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Barclays' investment bank in spotlight again as results loom

Last updated: 14:15 14 Feb 2023 GMT, First published: 14:41 10 Feb 2023 GMT

Goldman Sachs -

Barclays is possibly the most difficult to call of the big four banks reporting earnings this week.

Unlike Lloyds and NatWest, it has a big investment bank and while this has been a plus in recent years this time it might not be so straightforward.

Jobs cuts and downbeat outlooks were the tone of the recent statements from US bulge bracket rivals such as Goldman Sachs (NYSE:GS) following a slump in flotations, capital raisings and M&A activity.

Analysts point out that Barclays plays in the same pool while also having exposure to a strained UK mortgage market.

Brokers forecast fourth-quarter profits of £1.52bn ex litigation costs while for the full year £7.2bn is expected compared to £8.4bn in 2021.

As with all the banks, the bad debt line this time will be closely watched, especially with the cost of living pressures.

Barclays has a £161bn mortgage loan book, a £9bn credit card book in the UK and a £24bn credit card book in the US, notes wealth platform AJ Bell.

Non-City folk might also wonder how long litigation costs can be treated as a one-off as the FT reported today the bank is facing yet another probe, this time over a possible breach of UK anti-money laundering rules.

Natwest was fined £265mln in a criminal case last year for an AML breach.

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