Wednesday preview: Barclays delivers first-quarter results
Barclays will hog the spotlight Wednesday as it unveils its first-quarter results.
Barclays will hog the spotlight Wednesday as it unveils its first-quarter results.
Analysts at Investec expect the bank to report an adjusted pre-tax profit of £2.1bn or £1.6bn after allowing for the guided £0.5bn restructuring charge.
The company has been undergoing a massive reorganisation under new Chief Executive Officer (CEO) Antony Jenkins who announced his strategy at the time of annual results in February.
He has been trying to rework the bank's image following an LIBOR interest rate rigging scandal last year.
Last week, the bank restated its 2012 financial results saying that changes to accounting rules meant its profits should have been over £500m higher.
Barclays released an updated version of its full-year results that take into account the IFRS 10 and IAS 19 rules which came into effect on January 1st 2013.
"We note that Barclays' restatement document was uncharacteristically silent on Q1 2013 exceptional charges, from which we infer that any 'top up' misselling provisions will be minimal (or zero) this quarter. Welcome news," Investec said in a note last Friday.
The broker said its investment bank Barcap remains key to driving growth. It forecast a £1.3bn contribution from Barcap or 59% of the group's profit before tax.
It also anticipates a 7.0% year-on-year decline in Barcap revenues to £3.2bn. However, the fall will reflect a non-recurrence of a £0.2bn share-related gain realised in 2012 rather than a negative trend.
"Moreover, we anticipate substantially lower Barcap costs, down 14% [year-on-year]," the analyst added.
The bank was issued a 'buy' rating and a target price of 345p by Investec.
The results will come less than a week after the bank's investment banking boss Rich Ricci announced his retirement. His departure ended months of speculation that he would be ousted by Jenkins as part of a clampdown on executive pay.
"Confirmation that Rich Ricci, CEO Barcap is to retire on June 30th is hardly surprising, internally replaced by Eric Bommensath/Tom King," Investec said.
"Investors should welcome the news - ongoing revenue delivery, but with lower costs!"
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