Barclays Thrives on Volatility as Equities Beat Wall Street, , on October 23, 2020 at 7:22 am

Financial News
By
On October 23, 2020
In Financial News
Tags:

(Bloomberg) — Barclays Plc’s traders had another strong quarter as pandemic-driven market volatility persisted.The London-based bank’s securities division reported a 23% jump in foreign-exchange, rates and credit trading income in the third quarter, helping the company beat earnings estimates. Equity trading jumped 40%. Barclays also posted lower-than-expected impairments from the virus crisis.“The economic forecast is more moderate than we would have thought a couple of months ago,” and Britain’s mortgage market is “surprisingly robust,” Chief Executive Officer Jes Staley said Friday in a Bloomberg Television interview. “Capital markets globally will increasingly take a greater share of the financing of economic growth around the world, and we clearly saw that in the first three quarters of this year.”Barclays’ equity-trading gains beat all of the big five U.S. banks in the quarter. Total trading income jumped 29%, surpassing the 21% average at its Wall Street peers. Staley has championed the trading business in the face of criticism and the move has paid off during the pandemic, with historic volatility generating some of the best quarters ever for securities firms.The shares rose 3.5% at 8:02 a.m. in London. They’re still down 40% this year after the pandemic and forced dividend suspensions whipsawed banks around the world.Barclays’ domestic British bank also benefited from a pickup in mortgage demand, swinging back to profit.The performance comes despite a grim economic outlook. Barclays’ baseline forecast is for a more prolonged period of high unemployment in the U.K., though an upside scenario assumes a potential vaccine becoming available in the first half of 2021 and a consequent surge in consumer spending.Dividend DesireThe lender took a 608-million-pound charge to anticipate bad loans from the crisis as Britain heads into a historic recession. Analysts had expected a 1-billion-pound charge in the quarter. It’s likely that impairments will fall in 2021, Barclays said.The bank repeated that it would provide a year-end update on its plans for resuming dividends after the Bank of England forced banks to suspend them early in the crisis. “This is the strongest the bank’s balance sheet has been,” Staley said of the context for his talks with regulators.Staley has long argued that the corporate and investment bank provides a hedge during a time of crisis, and recently promoted two lieutenants to execute his vision. The division is now led by C.S. Venkatakrishnan and Paul Compton, putting them in the spotlight amid speculation about Staley’s eventual successor.Staley said this was the bank’s “best ever quarter in British pound terms” and was driven by “higher levels of client activity and volatility” in equity derivatives.Staley said he is ready to implement negative interest rates if needed. “I think it is important that central banks keep in their wallet the ability to use negative interest rates, but I personally believe here in the U.K. it’s not likely,” he said on Bloomberg Television.“We’d rather not charge our clients those negative interest rates, but we also have to manage the financial integrity of the bank,” he said.(Adds Staley comment, shares.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

Barclays Thrives on Volatility as Equities Beat Wall Street(Bloomberg) — Barclays Plc’s traders had another strong quarter as pandemic-driven market volatility persisted.The London-based bank’s securities division reported a 23% jump in foreign-exchange, rates and credit trading income in the third quarter, helping the company beat earnings estimates. Equity trading jumped 40%. Barclays also posted lower-than-expected impairments from the virus crisis.“The economic forecast is more moderate than we would have thought a couple of months ago,” and Britain’s mortgage market is “surprisingly robust,” Chief Executive Officer Jes Staley said Friday in a Bloomberg Television interview. “Capital markets globally will increasingly take a greater share of the financing of economic growth around the world, and we clearly saw that in the first three quarters of this year.”Barclays’ equity-trading gains beat all of the big five U.S. banks in the quarter. Total trading income jumped 29%, surpassing the 21% average at its Wall Street peers. Staley has championed the trading business in the face of criticism and the move has paid off during the pandemic, with historic volatility generating some of the best quarters ever for securities firms.The shares rose 3.5% at 8:02 a.m. in London. They’re still down 40% this year after the pandemic and forced dividend suspensions whipsawed banks around the world.Barclays’ domestic British bank also benefited from a pickup in mortgage demand, swinging back to profit.The performance comes despite a grim economic outlook. Barclays’ baseline forecast is for a more prolonged period of high unemployment in the U.K., though an upside scenario assumes a potential vaccine becoming available in the first half of 2021 and a consequent surge in consumer spending.Dividend DesireThe lender took a 608-million-pound charge to anticipate bad loans from the crisis as Britain heads into a historic recession. Analysts had expected a 1-billion-pound charge in the quarter. It’s likely that impairments will fall in 2021, Barclays said.The bank repeated that it would provide a year-end update on its plans for resuming dividends after the Bank of England forced banks to suspend them early in the crisis. “This is the strongest the bank’s balance sheet has been,” Staley said of the context for his talks with regulators.Staley has long argued that the corporate and investment bank provides a hedge during a time of crisis, and recently promoted two lieutenants to execute his vision. The division is now led by C.S. Venkatakrishnan and Paul Compton, putting them in the spotlight amid speculation about Staley’s eventual successor.Staley said this was the bank’s “best ever quarter in British pound terms” and was driven by “higher levels of client activity and volatility” in equity derivatives.Staley said he is ready to implement negative interest rates if needed. “I think it is important that central banks keep in their wallet the ability to use negative interest rates, but I personally believe here in the U.K. it’s not likely,” he said on Bloomberg Television.“We’d rather not charge our clients those negative interest rates, but we also have to manage the financial integrity of the bank,” he said.(Adds Staley comment, shares.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

168 Robinson Road,
Capital Tower, Singapore 068912
+65 3105 1295

Taiwan

5th Floor, No. 1-8, Section 5, Zhongxiao East Road, Taipei

Hong Kong

R91, 3rd Floor,
Eton Tower, 8 Hysan Ave.
Causeway Bay, Hong Kong
+852 3002 4462

Australia

44 Martin Place, Sydney 2000 Australia
+02 8319 3232

Indonesia

Millennium Centennial Center, 38th Floor, Jl. Jend. Sudirman Kav. 25
Jakarta 12920, Indonesia

Market Coverage