Barclays 2018 results: share price seesaws as full-year profit misses forecasts

Barclays reported full-year profit of £1.4 billion in 2018 on Thursday, seeing the bank swing back into the black after suffering significant losses in its previous fiscal year of £1.92 billion.

However, despite a relatively strong end to the year, Barclays recorded group profit of £3.5 billion, falling short of analysts’ forecasts.

The lender also used its recent trading update to announce that it will take allocate around £150 million aside to act as a Brexit buffer and reiterated its commitment to the UK as a British bank.

Barclays results: key figures

Barclays group profit before tax came in at £3.5 billion, which is inline with how the bank performed in the previous fiscal year. Meanwhile, its UK business saw profit increase to £2 billion, up from £1.7 billion in 2017, driven by lower interest margins and strong balance sheet growth.

‘2018 represented a very significant period for Barclays,’ Barclays Group CEO Jes Staley said. ‘In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started to see the earnings potential of the bank, as the strategy we have implemented began to deliver.’

‘This was evident in the improved performance across the Group compared to 2017,’ he added.

Barclays shaky share price amid UK economic uncertainty

The bank’s share price edged higher on Thursday morning following its full-year results, only for its gains to be eroded later on as investors grow increasingly weary of the impact Brexit will have on UK financial services.

The bank’s share price climbed as much as 4.3% on Thursday morning, but those gains were short-lived with the stock seeing its share price slump as trading continued.

Barclays confirms 6.5p dividend and pledges to return earnings to shareholders

The bank’s share price performance is a surprise considering the lender used its recent trading update to announce that it plans to return a greater proportion of its earnings to shareholder via share buybacks.

Barclays also confirmed that it will pay a 6.5p dividend to shareholders and announced that earnings per share was 21.9p in 2018.

‘Earnings per share excluding litigation and conduct for the full year was 21.9p,’ Staley said. ‘Our CET1 capital ratio of 13.2% is at our target of around 13%, and we have grown tangible book value for three quarters in a row.’

‘We will use the strong capital generation of the bank to return a greater proportion of those earnings to shareholders by way of dividends and to supplement those dividends with additional returns, including share buybacks,’ he added.