Barclays

Barclays has been in the news recently with the resignation of Jes Staley.

by John Royden

Head of Research

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Price
£1.93
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52 Week High-Low
£2.04—£1.30
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Net Yield
1.55%
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Hist / Pros Per
22.0/5.8
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Equity Market Cap
£32,557

Staley’s reputation was tarnished by his rule-breaking pursuit of the identity of a whistle-blower back in 2016 for which he was fined £642,430. Then, on 1st November 2021, we learnt that he had resigned to defend the manner in which he described his commercial relationship with the disgraced Jeffrey Epstein.  

To misquote Oscar Wilde, to suffer one regulatory hiccup, Mr Staley, may be regarded as a misfortune; to get hit by two looks like carelessness. He was right to resign and is set to be replaced by “Venkat” as he is known.  Venkat is a long standing senior Barclays employee, who promises more of the same.

That begs the question of what same looks like. Barclays says that its sensitivity to interest rate changes is £525 million per 0.25% increase in interest rates. That is because as rates rise, they pass the whole rate rise on to their borrowers but only some of it on to their depositors. For a bank that was making a pre-COVID-19  c£3 billion in after tax profit, interest rate changes are impactful.

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Winter Issue Thirty Seven