Barclay’s shares down heavily as bank raises bad debt provisions amid higher interest rates
Barclays stock is down heavily after it reported a disappointing set of results for the third quarter. IGTV’s Jeremy Naylor says it bodes ill for the rest of the sector reporting this week.
Barclay’s missed estimates at its investment bank and lowered guidance for its UK consumer lending unit as it expanded bad debt provision as borrowers are being weighed down by a big spike in interest rate payments
(AI Video Transcript)
Barclays' stock
Barclays' stock, took a big dive of almost 7% after the company announced that its financial results for the third quarter and nine-month period did not meet expectations. These results were not good news for its investment banking unit, as it did not make as much profit as predicted. In addition, Barclays had to lower its expectations for its U.K. consumer lending division because more people were having trouble paying back their loans due to higher interest rates. This is causing a burden for borrowers in the U.K. On top of all that, the corporate and investment banking unit did not bring in as much money as people had hoped for, with revenue slightly below expectations.
Lloyd's and NatWest
The drop in Barclays' stock is clearly shown in the charts, which demonstrate the negative reaction of the market to the company's poor performance. In just the first 20 minutes of trading, the stock went down 6.25%, reaching its lowest point since March 27th. Currently, the share price is hovering near a support level of 128 pence, which is also the lowest point seen on March 17th. Although it's still a ways off, the stock is in a tricky position and is in danger of reaching levels last seen on November 6th, 2020. This decline will likely have ripple effects on other banks like Lloyd's and NatWest, which are set to announce their financial results this week in the UK.
The decline in the stock's price
To summarize, Barclays' stock plummeted almost 7% after they released disappointing financial results for the third quarter and nine-month period. The investment banking unit did not meet expectations, and their U.K. consumer lending division had to lower its expectations due to more people struggling to pay back their loans. The charts clearly show the decline in the stock's price, which is getting close to its lowest point in months. This has implications for other banks reporting their results in the UK this week.
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