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Barclays PLC ADR BCS

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Decent Performance by Barclays in Third Quarter

Niklas Kammer, CFA Equity Analyst

Analyst Note

| Niklas Kammer, CFA |

Over the first nine months of this year, no-moat Barclays recorded profit before tax of GBP 6.90 billion versus GBP 2.40 billion. These results are however heavily affected by credit impairment charges in the period last year (GBP 4.30 billion) and releases year to date (GBP 0.60 billion). Excluding this line item, performance was decent. Total income generation was flat at GBP 16.80 billion, although the depreciating U.S. dollar versus the British pound was partially to blame. Operating expenses came in 6% higher than a year ago, driven by structural costs to improve its efficiency in the longer term as well as higher performance fees, which was only partially offset by the before mentioned foreign-exchange movement. We plan to take a fresh look at our model and anticipate a modest increase to our fair value estimate as a result of improving interest-rate expectations and lower loan losses than we had feared. Our no moat rating is unchanged.

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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

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