The FTSE 100 bank posted a £1.9bn attributable loss for the full year, as it reeled from the effects of one-off tax charges of £900m relating to the US tax reform and £2.5bn disposal charges from the sale of its South African banking arm. The British bank’s losses were further widened by £1.2bn worth of conduct charges.
However, this spot of bad news was overshadowed by the bank’s pledge to double its dividend in 2018. While the firm held the 2017 dividend at 3p, it vowed to bump up the payout to shareholders to 6.5p by the end of this year. Two years ago, it sliced its dividend by more than half.
Its share soared 5% to 214p per share during Thursday trading, making it easily the top riser of the FTSE 100.
Though investors warmly welcomed Barclays’ return to a higher dividend, Laith Khalaf, senior analyst at Hargreaves Lansdown, cautioned that red flags still abound.
“A promise to double the dividend this year has naturally got the market very excited, but revenues at the UK bank have actually flatlined, while the international division is flagging,” he said. “In particular the investment bank looks like a casino where the house isn’t winning.”
“Revenues fell despite an appreciation in the dollar last year, which doesn’t bode well for the weaker dollar environment we now find ourselves in,” Khalaf continued. “Barclays does say trading has been better so far this year, no doubt thanks to a return of some volatility in markets, but it’s clearly early days.
“Progress has been made at Barclays, most notably in consigning its non-core business to the history books, which has resulted in a significant fall in operating costs. The business has also been de-risked, boosting capital ratios and giving the bank confidence to increase the dividend back to where it was in 2015. However Barclays will be hoping top line growth isn’t so elusive in the coming year.”
