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The Markets
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Proactive UK has moved.
Coverage of London’s small caps continues on proactiveinvestors.com
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The Markets
by Proactive
Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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Go to Proactive UK

Banks

Barclays investment bank under scrutiny again in choppy markets

Can Barclay's investment bank arm (Lehman Bros in effect) continue its recent good performance

Barclays tomorrow is the second of the high street banks to issue third-quarter numbers.

HSBC got the season off to a mixed start on Tuesday and attention will focus on Barclay's investment bank arm (Lehman Bros in effect) and if it can continue its recent good performance.

Activist investor Sherborne has previously tried to get the bank to divest the business to no avail so far, but any trip-ups and the issue might raise its head again.

As a comparison, Goldman Sachs (NYSE:GS) posted better than expected results helped by a good fixed income performance at its trading operations offsetting the drying up of IPOs and M&A activity and how the mix pans outs at Barclays will be worth noting.

Barclays also has a £160bn mortgage loan book and an £8.8bn credit card book and Danni Hewson at AJ Bell pointed out that, going forward, it will have to make provisions if they think a loan is going sour rather than afterwards as in the past.

That is also something to watch for, Hewson notes.

Consensus forecasts are for Barclays to report profits of £1.8bn for the third quarter, against £2bn a year ago, with nine-month pre-tax to be £5.5bn compared to £6.9bn last year.

Ex-litigation, UBS reckons that will be £1.68bn and a CET1 ratio of 13.2%.

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