Barclays has announced plans to return a minimum of 10 billion pounds ($12.60 billion) to its shareholders between 2024 and 2026 and reorganize its business as part of a long-awaited strategy update.
Capital Returns and Business Reorganization
The U.K. bank intends to achieve this capital return through dividends and share buybacks while expanding the number of its business units from three to five. Chief Executive C.S. Venkatakrishnan is spearheading these efforts in a bid to boost investor confidence and revitalize the bank’s lagging share price.
Financial Targets
Barclays aims for a return on tangible equity exceeding 10% by 2024 and surpassing 12% by 2026, positioning itself for promising growth ahead of the anticipated strategy update.
Speaking about the plan, C. S. Venkatakrishnan stated, “Our new three-year strategy is focused on enhancing Barclays’ operational and financial performance, delivering increased returns, and providing consistent, appealing shareholder distributions.”
Financial Performance
For the three months ending Dec. 31, the FTSE 100-listed lender reported a pretax profit of GBP110 million, a decrease from GBP1.31 billion the previous year and below the estimated GBP238 million based on a company-compiled consensus.
Despite facing a GBP927 million charge from previously mentioned structural cost actions – higher than analysts’ expectations of GBP825 million – bringing the total cost actions to GBP1.05 billion for the year.
Reorganization Plan
Barclays’ reorganization includes segmenting its business into five operating divisions: Barclays U.K., Barclays U.K. Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays U.S. Consumer Bank.
According to analysts at Citi, this update is likely to be well received, especially considering the recent decline in Barclays’ share value over the past year.
