Extracts below. Click on links for full articles.
FT - Chris Hughes
http://www.ft.com/cms/s/0/10771374-9d2a-11dc-af03-0000779fd2ac.html
John Varley needs the bank's non-investment banking business to step up a gear if he is to address Barclays' embarrassingly low stock market valuation.
Even after bouncing off its recent low, the stock is priced at a 35% discount to the UK stock market when valued on the P/E ratio for 2008 according to forecasts by Credit Suisse, Barclays' company broker. That is at the lower end of its historic trading range.
To be fair, Barclays is certainly making progress in its businesses outside Barcap. For starters, retail customers appear to be coping well with higher interest rates. Problem loans are falling in Barclaycard and the UK retail bank, and are growing at a slower pace in the business bank. Meanwhile, mortgage bad debts are "negligible".
Moreover, income growth is strong in Barclays' international banking and wealth management businesses. The same goes for the BGI fund management unit, even though its revenues are largely dollar denominated. And Barclaycard's US business is now expected to be profitable this year, when it was previously targeting only break-even. The only fly in the ointment overseas is the impact that the depreciating rand has had on the contribution from Absa...
The snag is that these positive points do not add up to a convincing antidote to the uncertainty surrounding Barcap.
But the good news for Barclays shareholders is that if this is as bad as it gets, then some expect the shares will rally before long.
FT - Maggie Urry
http://www.ft.com/cms/s/0/39c7b1e2-9d53-11dc-af03-0000779fd2ac.html
Chris Lucas, finance director, also revealed Barclays expected to make a gain of about £400m from buying back shares to neutralise the effect of issuing shares to China Development Bank and Temasek...The shares were issued at a price of 720p. Barclays has bought back about 280m at an average price of 603p.
Reuters - Steve Slater
http://uk.reuters.com/article/businessNews/idUKWLB368620071127?feedType=nl&feedName=ukdailyinvestor&sp=true
Barclays is on track to meet analysts' expectations for earnings growth of 4 percent this year and said diversification had provided some shield from recent turbulence in capital markets. ...it should deliver a 2007 pretax profit of 7.1 billion pounds, up from underlying profit of 6.8 billion in 2006.
"The market should be relieved that there were no further BarCap risks announced and trading elsewhere is in line with expectations," said James Hutson, analyst at Keefe, Bruyette & Woods.
Barclays said its liquidity remained strong and it continued to see good inflows of deposits. Its performance in the first nine months of this year was underpinned by "good" profit growth in retail after the impact of refunds on bank charges and at asset manager Barclays Global Investors. It reported "strong" profit growth at its Barclaycard credit card unit excluding one-off items, "very strong" income growth in its international businesses outside South Africa, and "excellent" profit growth at Barclays Wealth. Bad debts at Barclaycard and for unsecured lending continued to improve, it said. The bank had already said its Barclays Capital investment bank unit would take a 1.3 billion pound writedown for losses on securities linked to the U.S. subprime housing crisis, but the unit's profits for the 10 months to the end of October were still up on the year before at 1.9 billion pounds. Barclays said its UK Banking business should cut the ratio of costs to income to 50 percent this year, excluding the impact of refunds on charges, from 52 percent in 2006. UK business banking profits had also shown good growth in income and profits, it said. Depreciation in the South African rand would leave Absa's profit contribution down on the year in sterling terms, despite strong growth in local currency terms. BGI's profit growth in sterling would also be dampened by the weak U.S. dollar. Earnings should come in near the 68.8 pence per share currently forecast by analysts, up from underlying EPS of 66.8p a year ago, it said.
Citywire - Charlie Parker
http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=98976&re=2119&ea=91427&XDU=11bc4b75-04dd-4a14-8074-63580af87edd&XDS=O&XDNG=True&XDKL=0&XDURL=http%3a%2f%2fwww.citywire.co.uk%2fNews%2fNewsArticle.aspx%3fVersionID%3d98976%26re%3d2119%26ea%3d91427
Brokers Collins Stewart reacted by rating Barclays a buy and putting a price target of 893p for the Bank. Analyst Alex Potter said: 'UK retail and commercial businesses both saw strong income growth with the tailwind of higher rates clearly helping' Potter also said that the downgrade due to accommodate the writedowns at Barclays Capital were really very modest. KBW was more measured in its praise giving the stock a 'market perform' rating with a price target of 660p.
Telegraph - Philip Aldrick
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/28/cnbarc128.xml
Finance director Chris Lucas said 83pc of the buyback was complete and there would be a small credit in the annual figures.
[My note: The "credit in the annual figures" probably refers to the surplus of the break fees re ABN-Amro over costs and not as a result of the buyback.]
Times - Patrick Hosking and Miles Costello
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2957499.ece
Barclays declined to elaborate on the latest trading at BarCap, except to say that its confident group-wide forecast was based on the latest prices of securities held on BarCap’s books.
Chris Lucas, the finance director of Barclays, cautioned that recent performance at the retail bank had been “a mixed story”. Amid increasing indications that an economic downturn is looming, he said: “Mortgages, savings and current accounts are performing well in line with the first half. Unsecured lending and payment protection insurance – both of these have been performing less strongly, as a result of the stance we have taken to risk.” Mr Lucas said that revenues at Barclays’ retail bank most probably would grow at a slower rate in the second half than in the first. Revenues in the first six months of the year grew by 5 per cent, and profits increased by 9 per cent.
He said: “Like all banks, we are not immune to changes in market conditions. However, taking into account everything that we know today, we still expect our earnings to be broadly in line with consensus.”
Although analysts said that a 4 per cent profit increase would be a very creditable performance in the present market, it still would bring an end to the galloping growth of the past four years.
It also raises doubts over whether Barclays will be able to lift the dividend as fast as recently. Last year it was boosted by 17 per cent. John Varley, the chief executive, said two weeks ago that there was no change to the bank’s progressive dividend policy, but, with headline earnings per share likely to fall fractionally this year, Barclays is predicted to leave the total dividend unchanged at 34.3p. Even then, the yield is 6.5 per cent.
The bank revealed that it had spent £1.7 billion so far on its share buyback, paying an average price of 603p over the past few months.
Sandy Chen, the Panmure Gordon analyst, raised fresh questions about a further £10.4 billion of exposure at BarCap to structured credit markets. He said that Barclays could suffer hits of £5 billion to its structured asset-backed securities portfolio and £5.4 billion to its sub-prime mortgage book.
Keefe, Bruyette & Woods analysts said: “The market should be relieved that there were no further BarCap risks announced and trading elsewhere is in line with expectations.”
Alex Potter, the Collins Stewart banks analyst, said: “Doubts around this business are likely to persist until the finals in late February, but we take comfort from management’s stance on BarCap’s prospects.”
Barclays said that its retail banking business in the UK would shake off customer settlements on overdraft fees to deliver “good growth” in pretax profits over the full year to the end of November.
The bank was on course to improve its cost-to-income ratio by 2 per cent this year, Barclays said.
Bad-debt charges at Barclaycard continue to improve and the division’s American arm is set to move into profits this year, it said.
Independent - Sean Farrell
http://news.independent.co.uk/business/news/article3201607.ece
A fund manager said Barclays' statement "gives a degree of comfort" but said the UK's banks needed debt markets to reopen to avert a big hit to earnings and the economies that feed their growth.
Chris Lucas, the bank's finance director, told analysts 2008 would bring "a greater range of uncertainty".
Citywire - Douglas Bence
http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=98989&re=2124&ea=91427
While uncertainties remain about the current performance of Barclays Capital, analysts are taking the view that Britain's number three bank will lead the eventual recovery in the sector.
Collins Stewart analyst Alex Potter believes 'Barclays will be a key recovery play in the UK banks.'
But there were no details in the trading of Barclays Capital trading this month and none were revealed in an hour long conference call with analysts.
the group still expects it to grow by around 15-20% over the medium term.
'Bar Cap is a surprisingly diverse business model and appears to have stuck more resolutely than some peers to an "originate and distribute" model,' added Potter.
'Doubts around this business are likely to persist until the finals in late February, but we take comfort from management's stance on its prospects.'
The bank continues to take a cautious approach to personal loans, but these are likely to increase in the coming months, but on those certain areas where the risks of default are low.
Guardian - Graeme Wearden
http://www.guardian.co.uk/business/2007/nov/27/barclaysbusiness.banking
On the retail side, it has been hit by the cost of repaying customers who had been penalised for exceeding their overdraft limit.
Barclays paid out £87m in settlements in the first half of the year. Like other banks, it suspended repayments at the end of July until a test case is held in 2008 to determine if such charges are illegal.
Alex Potter of Collins Stewart said doubts over Barclays Capital were likely to linger until the full results for 2007 are published in February, but said he was encouraged that the company was sticking with its target of 15-20% annual growth for the unit.
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