Barclays Earnings: Performs Within Expectations; New Strategy Not Dramatically Different

Barclays reported fourth-quarter operating profits before tax of GBP 110 million versus GBP 1.310 billion a year ago after booking GBP 927 million in structural costs. Excluding these charges, performance was within expectations with income down 3% and a cost/income ratio of 71%. Barclays also published a new strategic update, which entails reshuffling divisions as well as some plans for smaller disposals. After Reuters reported that management had been engaging in various scenarios to address its lagging performance, in particular its investment bank, we see little has changed dramatically after going over the new strategic direction. Positively, Barclays intends to return at least GBP 10 billion in shareholder distributions between 2024 and 2026 with a preference for share buybacks following its new 12% return on tangible equity target by 2026. We maintain our GBX 210 per-share fair value estimate and no moat rating.