Skip to Content

Barclays PLC BARC

Rating as of

Morningstar’s Analysis

Valuation
Currency in GBX
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Barclays Passes 2021 Stress Test

Niklas Kammer, CFA Equity Analyst

Analyst Note

| Niklas Kammer, CFA |

No-moat Barclays comfortably passed the Bank of England’s stress test. At its lowest point, Barclays’ common equity Tier 1 ratio dropped to 8.2% from a starting point of 14.3% at the end of 2020, on a fully loaded basis. This was comfortably above the minimum of 7.0% regulators believe Barclays should hold in capital reserves. The stress test aims for a plausible and severe macroeconomic scenario, which is significantly more punitive than what the U.K. economy experienced during 2020. However, we would highlight that the scenario for the U.K. economy was harsher than for the global economy. As such, Barclays’ geographical diversification benefits the bank relative to the more U.K. focused banks in our coverage. Overall, the bank appears adequately capitalized, will remain functional without capital infusions in such a severe macroeconomic scenario, and does not rely on transitional accounting arrangements to smooth capital drawdowns throughout the stress. We maintain our GBX 185 per share fair value estimate.

Read Full Analysis

Company Profile

Business Description

Barclays is a universal bank headquartered in the United Kingdom. It operates via two principal segments; U.K. (38% of profit before tax) and International (62% of PBT). In its U.K. segment, the bank provides current accounts, mortgages, savings and investment management services, credit cards, and business banking services to retail clients and small and medium-size enterprises. The international segment includes a corporate bank offering banking solutions to large corporates, a bulge-bracket global investment bank, and a credit card and payments business. In 2018, Barclays generated roughly 52% of its income from the U.K. and 34% from the United States.

Contact
1 Churchill Place
London, E14 5HP, United Kingdom
T +44 2071163170
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 83,000

Related