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Barclays Shares Fall 8% as Trading Revenue Plunges

October 26, 2017

Investors dumped Barclays shares following the bank's release of quarterly earnings Thursday morning - wiping out over $3 billion in market capitalization. While the bank recorded a 41% jump in net profits for the 3rd quarter, it reported a 14% drop in trading revenues for the first nine months of the year.


The disappointing results ran contrary to trading growth targest established by CEO Jes Staley, who had championed investment banking while some analysts and investors had been calling for a focus on retail banking and the credit card business.


In the earnings call, Jes Staley said he would push ahead with reinvesting in the (investment banking) business, outlining plans to shift some 20 billion pounds in assets from corporate lending to riskier but higher-yielding trading activities. Staley also signalled his confidence in the bank's ability to increase returns by putting a timeframe on its targets - with Barclays saying it aims to achieve an overall return on equity above 9% in 2019, and above 10% by 2020. Such targets exceed the 8% ROE that analysts at Jefferies have predicted.


FINANCIALISH TAKE AWAY.    Today's news presents further challenges for CEO Jes Staley, who is has had a disastrous year-to-date:


  • A Whistleblower Investigation;
  • A Legal Battle Between His Brother-in-Law and KKR, a Barclays Client;
  • An Email Spoofing Incident;
  • An Investigation Into a Possible 'No Poach' Agreement with JPMorgan