Barclays unveils massive overhaul as profits fall 6%

(Sharecast News) - Barclays Bank unveiled a swathe of changes on Tuesday, including a structural overhaul of operations, £2bn in cost cuts and a massive increase in shareholder payouts as annual earnings fell by 6%. Pre-tax profit for the 12 months to December 31, 2023 came in at £6.55bn, down 6%. Fourth-quarter earnings were £110m compared with £1.3bn a year ago.

Barclays said it was aiming for £1bn of gross efficiency savings in 2024 and total gross efficiency savings of £2bn by 2026.

It added that it planned to return at least £10bn of capital to shareholders between 2024 and 2026, through dividends and share buybacks, "with a continued preference for buybacks". The bank will buy back a further £1bn in stock this year.

Credit impairment charges were £1.8bn, up from £1.2bn a year earlier driven by higher delinquencies on credit card accounts in the US.

Net interest margin - the difference between loan and savings rates - rose to 3.13% from 2.86%, as higher interest rates and associated structural hedge benefit outweighed mortgage margin pressure and weaker deposits as savers searched for better rates after years of paltry returns.

Income at the corporate and investment bank fell 4% to £12.6bn, driven by lower client activity in both global markets and investment banking.

Chief executive CS Venkatakrishnan said Barclays would be reorganised into five new divisions: Barclays UK; Barclays UK Corporate Bank; Barclays Private Bank and Wealth Management; Barclays Investment Bank; and Barclays US Consumer Bank.

Reporting by Frank Prenesti for Sharecast.com