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UK bank Barclays logs falling profit but shares rally

LONDON (AFP) – United Kingdom (UK) bank Barclays said yesterday its annual profit slid on a large restructuring charge, but shares rallied on a GBP10-billion (USD12.6-billion) plan to return cash to investors.

Profit after tax slid 15 per cent to GBP4.3 billion last year on a GBP900-million charge for the fourth quarter, Barclays revealed in a results statement.

The lender, fresh from axing 5,000 jobs last year, outlined a plan to slash another GBP2.0 billion in costs in the coming years but did not specify further cutbacks.

Barclays added it planned “to return at least GBP10 billion of capital to shareholders between 2024 and 2026, through dividends and share buybacks”.

“Our new three-year plan… is designed to further improve Barclays’ operational and financial performance, driving higher returns and predictable, attractive shareholder distributions,” chief executive C S Venkatakrishnan said in the earnings release.

The news sent Barclays’ share price rallying over six per cent in early deals to top London’s benchmark FTSE 100 index, which dipped slightly overall.

Its share price later pared gains to stand at 155.18 pence, still a gain of 4.2 per cent from Monday.

The group returned GBP3.0 billion to shareholders in 2023, up almost 40 per cent from the year before.

Revenue grew two per cent last year to GBP25.4 billion on the back of rising interest rates, which attract savers and also increase returns on bank loans. The hikes followed moves by the Bank of England and central banks in other countries in ramping up borrowing costs in a bid to curb soaring inflation.

Barclays added yesterday that its operating costs jumped 12 per cent to GBP16.7 billion last year.

The company axed 5,000 jobs in 2023, or six per cent of its global workforce.

“We are not specifying right now” how many more jobs will be cut, Venkatakrishnan told reporters when questioned yesterday.

A man cleans a sign outside a branch of a Barclays bank in the City of London. PHOTO: AFP