It may be boom time for the UK economy according to Barclays chief executive Jes Staley but not for the company itself judging by the reaction to its latest trading update, says Russ Mould, investment director at AJ Bell.
“The decision not to adjust its previous bad debt estimates, unlike most of its peer group, appears to have spooked the market along with a patchy investment banking performance and a cautious view on costs as Barclays looks at reducing its physical footprint.
“Less of us seem to be splurging with our credit cards in lockdown judging by the performance of Barclaycard, perhaps because of belt tightening on one side and on the other because some people have built up a cash buffer and therefore don’t need to use credit at a time when there’s less to spend on.
“Nonetheless it is still surprising to see such a seemingly positive set of numbers overall receive raspberries rather than rewards from the market.
“The market response also reinforces the idea that it is better to travel than arrive with Barclays shares having performed strongly since the start of the year ahead of the results.
“While the lack of a dividend was not a surprise it is still likely to nag away at investors for whom a big driver for investing in banks is income – with Barclays not yet providing clarity on when normal service on payouts will be resumed.”