Barclays finds itself out of step with its peers. While UK corporate lending grew 14 per cent year on year in the third quarter and costs beat expectations, shares have fallen 12 per cent in the year to date, even as the broader European lender index rose 9 per cent. Chief executive CS Venkatakrishnan has delivered on operational promises, but investors remain unconvinced.
The bank's identity crisis deepens the divide. It is too British for investors nervous about gilt markets and tax rises, yet its large trading operations make it too American for those seeking a clean UK bet. Revenue at Barclays' investment bank rose just 1 per cent year on year, compared with 15 per cent at JPMorgan Chase.
Next week's Budget from chancellor John Healey may ease some pressure. Analysts at Citigroup expect it to end months of uncertainty, and calmer gilt markets could provide further relief. The bank also hinted it may reduce its target capital holdings in fourth-quarter results.
Still, Barclays trades at a 40 per cent discount to European peers on a price-to-book basis, reviving merger talk with US lender Wells Fargo that investment bankers say would be a distraction.
Source: Financial Times Companies · Summarized by HeadlinesBriefing