Despite a “once-in-a-lifetime crisis”, Barclays has delivered “forecast-beating profits”, says Ben Marlow in The Daily Telegraph. That is due to its investment bank, which is “firing on all cylinders”. The shares rose by 7% on the news.
With boss Jes Staley pledging to “hang around for several years yet”, it looks as though activist shareholder Ed Bramson’s “hostile” campaign to get rid of Staley and move Barclays away from investment banking has been a “complete failure”.
The latest results show the benefit of having a “diversified business model” rather than narrowly focusing on retail banking.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Not so fast, says Lex in the Financial Times. Over the past year Barclays’ share price has largely been determined by the performance of the overall European banking sector, which has been hit by fears of a second lockdown. So, unless bond yields change tack and rise, pointing to “strong economic recovery”, it is “hard to see” the stock rising further.
Indeed, the “surging” investment bank may already be “running out of steam”, with sales in the last quarter 16% below the average of the two previous quarters, says Liam Proud on Breakingviews. What’s more, a few good quarters don’t make up for the “sub-par” returns that it has generated over the past few years. Over the last 19 quarters the unit actually “destroyed” value due to its low return on equity. With the board already engaged in “succession planning”, a candidate “less attached” to the markets business would be the best choice to succeed Staley.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
In the doghouse: hundreds of investment funds are underperforming - is it time to sell?
News The latest Spot The Dog research from Bestinvest reveals 151 funds are failing to beat their benchmark. We reveal the worst performers
By Marc Shoffman Published
Nationwide: House prices creep up for the first time in over a year
Nationwide’s latest house price index reveals property prices are finally rising. Will this pattern continue in 2024?
By Vaishali Varu Published
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
Magic mushrooms — an investment boom or doom?
Investing in these promising medical developments might see you embark on the trip of a lifetime.
By Bruce Packard Published
What pension providers don't tell you about your retirement money
Check the small print from your pension provider or risk losing thousands.
By Merryn Somerset Webb Published
Should you invest in sector funds?
Sector funds can be a useful way to fine-tune a portfolio or track a theme, but check what the index holds.
By Cris Sholto Heaton Published
Three high-quality global companies for growth
James Harries, a senior fund manager at STS Global Income & Growth Trust highlights three favourites.
By James Harries Published
Four high-quality stocks set for decades of dividend and earnings growth
Charles Luke, an investment manager for Murray Income Trust, highlights four favourite high-quality stocks.
By Charles Luke Published
Humana sees healthy growth in US healthcare
Humana is a major player in the American market and the stock’s valuation looks reasonable.
By Stephen Connolly Published