Regulatory fines, loan losses and lower investment bank profits have driven Barclays’ earnings decline from its 2021 peak.
TheBank expects further increase in loan losses in 2023.
But dividend per share stands at 14-year high and shares look cheap relative to the bank’s assets.
“There is much to like about Barclays’ 2022 results – margins on the loan book are up, the dividend per share is up to its highest level since 2008 and overall profits would have set a new high for this century if the bank did not have to pay out more than £2 billion in regulatory fines and costs for litigation and compensation,” says AJ Bell investment director Russ Mould.
“But there lies the problem, because there always seems to be an ‘if:’ if there hadn’t been another fine for poor conduct; if the investment bank had done better; and if sour loan write-downs had not gone up the results would have looked better.
“All of those ifs, buts and maybes help to explain why the shares are down today and why they trade at less than two-thirds of the stated tangible book value per share of 295p. The shares are undeniably cheap, but investors clearly think they deserve to be cheap for three reasons, despite those lofty profits and cash returns to shareholders.”
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