In key news on UK stocks, Barclays PLC (GB:BARC) shares rallied nearly 4% as of writing, after the bank released upbeat first-quarter results. The bank’s overall income declined by 4% year-over-year to £7 billion. However, it surpassed the estimated £6.9 billion. Barclays’ income was primarily affected by its mortgage business, which faced increased competition and weak demand. Pre-tax profit amounted to £2.3 billion, which was down from £2.6 billion a year ago, but still exceeded expectations of £2.2 billion.
Barclays is among the top four banks in the UK, serving approximately 48 million customers globally.
Highlights from Barclays’ Q1 Results
The numbers surpassing expectations reassured investors that Barclays’s turnaround plan remains on track, despite challenges in the mortgage and investment banking divisions. In the first quarter, the income from the investment bank division decreased by 7%, as robust performance in equities was offset by reduced income in FICC (fixed income, currency, and commodities).
In Q1, Barclays’ operating costs declined by 3%, driven by £200 million in efficiency savings. As part of its turnaround plan, the bank aims to generate cost savings of £2 billion by 2026. In February, the bank announced a strategic turnaround plan, along with its 2023 annual results, to revive its share price growth and drive more profits.
Additionally, Barclays achieved a Q1 RoTE (return on tangible equity) of 12.3%, aligning with its goal of surpassing 10% in 2024 and exceeding 12% in 2026. The reported CET1 (Common Equity Tier 1) ratio, an indicator of financial strength, stood at 13.5%, within the target range of 13% to 14%, though down from 13.8% in the previous quarter.
Is Barclays a Good Stock to Buy Now?
On TipRanks, BARC stock has received a Strong Buy rating, backed by 10 Buys and one Sell recommendation. The Barclays share price forecast is 254p, which is 27.5% higher than the current trading level.
