Barclays (LON:BARC) is facing calls from investors to spin off its high street operations from its investment banking arm, The Telegraph reported. The news comes after the FTSE 100 group recently unveiled the board of its investment banking business in preparation of ringfencing rules scheduled to come into force in 2019 and intended to prevent a repeat of state-funded bailouts.
Barclays’ share price fell on Friday, losing 1.33 percent to close at 208.50p, underperforming the broader UK market, with the benchmark FTSE 100 index shedding 35.05 points to end the session 0.47 percent lower at 7,378.39. The group’s shares have added just under 40 percent to their value over the past year, but have given up more than six percent in the year-to-date.
The Telegraph reported over the weekend that about a fifth of Barclays’ shareholder base was understood to favour a full split that would leave the lender’s high street operation and its investment arm with separate stock market listings. Some big investors meanwhile are thought to like the bank to go a step further and pursue a more radical separation amid concerns about weak profitability and the fines it has received for past misconduct.
“There’s a lot of UK investors that wished they didn’t have an investment bank,” one senior fund manager who holds Barclays shares told the newspaper, adding that they “hate the idea of having an investment bank with lower returns and volatility”.
The 21 analysts offering 12-month price targets for Barclays for the Financial Times have a median target of 230.00p, with a high estimate of 265.00p and a low estimate of 180.00p. As of July 14, the consensus forecast amongst 25 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.