FINANCIALS: Barclays Results: Solid Laterals But Expectations Muted

Barclays (BACR: Baa1/BBB+/A) results are due 1-Aug. Spreads (and equity) have outperformed over the last month as US reporting generally looked reasonable and UK asset quality similarly. These are likely to be key features, we feel.

• Last time around (25-Apr) were positively received with a small revenue beat but a more positive loan loss performance. Guidance wasn’t upgraded but the (reaffirmed) FY24 RoE target is still not discounted in consensus.
• The bank was reportedly in talks with GS to buy its (small) GM-branded cards business, having bought the bulk of Tesco Bank’s asset earlier this year. Lateralsfrom peers have been mixed with UK asset quality generally being robust but a more mixed picture for US cards (COF disappointed, BAC the opposite). IB revenues look set to be reasonable with improvements in the primary and equity businesses more positive for UBS, for example, than Barclays.
• Spreads have done very little since those results, having outperformed pretty well from the start of the year to that point (YTD -49bp vs. €IG banks -33bp). They have tightened 9bp over the last month (peers -3bp). Similarly, the equity has outperformed by c.7pp over the last month, largely following positive US bulge bracket IB reporting having been positive.
• Estimates are little changed since 1Q24 stage with revenues trimmed <1% and earnings moved even less.

Results are 0700 (London time) with conf call at 0930 at: https://www.netroadshow.com/events/login?show=79f8c38c&confId=67477