Barclays Results 25-Apr: Lots Of Hope Built-In

Barclays results are due 25-Apr and, after the strategy refresh last time (20-Feb) alongside recent credit and equity performance, there’s a lot of hope and expectation built-in, we feel. Indications from peers (US banks, Lloyds) have been solid-to-good.

• Results last time around were underwhelming but the accompanying strategy refresh included an upgraded equity payout commitment and a commitment (again) to shrink capital usage within the investment bank. Some of the presentational changes back then hinted, to us, at the potential to sell some US assets (cards, perhaps?) which would be a credit positive, in our view.
• Recent US bank results have been good in FICC and DCM particularly, which are positive laterals for Barclays’ IB. Further, Lloyds results today are indicative of solid performances in UK retail banking, we feel.
• BACR spreads are c.60bp tighter YTD (€IG banks -37bp) so well ahead of the peers on the derisking elements to the strategy review, we feel. The equity is up 28% since that capital commitment, well ahead of SX7P (+14%).
• Earnings estimates are up: FY25 earnings are up 11% since results (FY24 +4%) driven by 3% revenue upgrades for next year (flat this year).

Results due 0700 (London time), conf call is 0930 at https://www.netroadshow.com/events/login?show=09e2014f&confId=63702