London, England – Barclays, a prominent global financial institution, reported a 15% decrease in annual net profit, signaling a challenging year for the banking giant.
The bank’s net attributable profit for the year totaled £4.27 billion, down from £5.023 billion in the previous year and below a consensus forecast of £4.59 billion. Despite the decline in profit, Barclays announced an additional share buyback of £1 billion and unveiled a new three-year plan aimed at enhancing operational and financial performance.
Barclays faced a £900 million hit in the fourth quarter due to structural cost-cutting measures, which are projected to result in gross cost savings of around £500 million this year, with an expected payback period of less than two years.
Notable highlights from the bank’s performance include a 3% decrease in fourth-quarter group revenue and an increase in credit impairment charges. The bank’s common equity tier one (CET1) capital ratio, a measure of financial strength, saw a slight decrease to 13.8% from the previous quarter.
Additionally, Barclays witnessed a decline in return on tangible equity (RoTE) for the fourth quarter, signaling a challenging period for the financial institution.
The bank’s traditionally strong corporate and investment bank (CIB) experienced a slowdown in 2023, particularly in its fixed income, currency, and commodities trading division, as market volatility moderated.
In response to the challenging financial landscape, Barclays announced a significant operational overhaul, including substantial cost cuts, asset sales, and a reorganization of its business divisions. The bank aims to return £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks.
Barclays is targeting total gross cost savings of £2 billion by 2026 and will divide its business into five operating divisions as part of the reorganization. This strategic realignment aims to provide enhanced and more granular disclosure of the performance of each operating division, along with increased accountability from an operational and management standpoint.
Despite the challenging financial results, Barclays remains committed to delivering value to its shareholders and pursuing initiatives to enhance its performance and financial resilience.