Barclays’ bounce won’t last
Barclays shares rose by 7% after it delivered “forecast-beating profits”. But the surge could be running out of steam.


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

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
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
-
Digital Services Tax: will Reeves let big tech off lightly to avoid tariffs?
Rumours are circulating that the Digital Services Tax on big tech companies could be cut as Rachel Reeves seeks to appeal to president Trump
By Dan McEvoy Published
-
Rachel Reeves set to increase penalties for filing tax returns late
The Chancellor will announce hikes to penalties for late tax returns in her Spring Statement as she scrambles to raise an extra £1 billion a year. Here’s what you need to know
By Daniel Hilton Published
-
Weight-loss drugs could revolutionise the economy – the investments to buy now
The new generation of weight-loss drugs are a boon for the overweight, but they also promise to change our relationship with food and revolutionise the economy
By Dr Matthew Partridge Published
-
Find tomorrow’s Asian giants while they are still smaller companies
Opinion Nitin Bajaj, portfolio manager of the Fidelity Asian Values trust, picks three Asian companies to invest in.
By Nitin Bajaj Published
-
AI will maintain Moody’s market lead, says Stephen Connolly
Opinion Veteran data provider Moody's has adapted well to the modern world, and is one of Warren Buffett’s longest-held investments
By Stephen Connolly Published
-
Is BlackRock World Mining gearing for a recovery?
Opinion After a frustrating year, BlackRock World Mining is positioned for growth and to capitalise on the sector's recovery
By Rupert Hargreaves Published
-
Should you limit exposure to US tech stocks?
An end to the AI boom would shake both US funds and global trackers. Here’s one way to trim exposure to US tech stocks
By Cris Sholto Heaton Published
-
The mystery of America’s gold and why an audit matters
How much gold does the US actually have? Dominic Frisby explains why it matters
By Dominic Frisby Published
-
Art vs AI: artists’ uprising takes on the bots
AI performs impressively, but it’s all based on human work that was taken without payment. The government thinks this is fine. Copyright holders beg to differ
By Simon Wilson Published
-
The benefits of a stock bubble
Opinion We tend to think of stock bubbles as bad things but, as the dotcom craze shows, good things can come from them, says Matthew Lynn
By Matthew Lynn Published