The stock price of Barclays PLC (LON:BARC) (LSE:BARC.L) has risen 2.9% after the release of its results to the stock market.
Its core businesses of Barclays UK and Barclays International registered a rise in PBT of 4% excluding notable items. Barclays UK delivered a RoTE of 19.3% excluding notable items, while Barclays International’s RoTE excluding notable items was 8%. The bank brought further focus to the Corporate and Investment Bank, with income growing 6%. It also saw strong growth in Consumer, Cards and Payments, where income increased 21%. The core RoTE excluding notable items was 9.4%.
Barclays reduced its stake in Barclays Africa via the sale of 12.2% in May. In Q4, it agreed with regulators and local management the proposed separation arrangements. It also reduced non-core risk weighted assets (RWAs) by £22 billion, with £12 billion of that reduction coming in Q4. It will now close non-core 6 months earlier than expected on 30 June 2017.
Organic profit generation strengthened the CET1 capital ratio by 100 basis points to 12.4%. This puts the bank on target to meet its end-state target and it believes it is well positioned to absorb headwinds over the next few years.
In the last 6 months, Barclays’s stock price has easily outperformed sector peers Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L), Standard Chartered PLC (LON:STAN) (LSE:STAN.L), HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L) and Royal Bank Of Scotland Group plc (LON:RBS) (LSE:RBS.L). HSBC’s stock is up 2%, RBS’s stock price is 29% higher, Lloyds is up 22% and the Standard Chartered stock price is 21% higher than 6 months ago.
In my view, Barclays is a good stock to own for the long run. I like the strategy it has adopted and in my opinion it is becoming a stronger bank through its restructuring. I feel Standard Chartered and HSBC’s stock prices will perform well as they make the necessary changes to their businesses, while Lloyds also has investment appeal in my view. RBS reports after Barclays and on a relative basis, I think buying Barclays’s stock is a sound move.