News that challenger bank N26 is exiting the British market made headlines already this week, but, Barclays will give investors a much clearer insight into the banking sector’s outlook post-Brexit.
Last August, shares in the company fell to their lowest point since the financial crisis as worries about Brexit combined with a pre-deadline surge in applications for compensation for the industry’s mis-selling of payment protection insurance, plus renewed criticism from activist investor Edward Bramson.
The last we heard from Barclays was a nine-month update in October where the blue eagle bank beat expectations for profits, set aside a further £1.4bn to cover the PPI fallout and warned that the outlook for 2020 was “unquestionably more challenging … in particular given the uncertainty around the UK economy and the interest rate environment”.
The banking sector’s shares were given a boost by the Conservative party’s general election victory that was seen as “market friendly”, although this evaporated fairly quickly as the market factored in the potential for an interest rate cut from the Bank of England and continued angst about Brexit negotiations.
For the full year, Barclays is forecast to deliver pre-tax profit of £5.4bn compared to £3.5bn a year earlier, with the consensus estimate at £6.1bn for 2020.
A final dividend of around 6p per share is expected following the 3p paid share at the half-year stage, though the BoE's latest stress tests implied that sector dividends might need trimming.
Other things to watch will be the performance of the corporate and investment bank (CIB), which is now Europe’s only investment bank in the heavyweight 'bulge bracket' following Deutsche Bank’s exit plans, and is also the unit that has been the main target of Bramson’s ire.
Thursday 13 February
Finals: Bank Of Georgia Group PLC (LON:BGEO), Barclays PLC (LON:BARC), Churchill China PLC (LON:CHH), Coca-Cola HBC AG (LON:CCH), Indivior PLC (LON:INDV), Lancashire Holdings Ltd (PLC:LRE), Relx (PLC LON:REL)
Economic data: RICS Housing Market Survey, US inflation