Barclays (LON:BARC) plans to step up financing in its corporate and investment bank, Reuters has reported. The move is part of the FTSE 100 group’s strategy to improve returns in the business.
Barclays’ share price has jumped in today’s session, alongside other London-listed lenders, benefitting from a rise in the pound. As of 14:39 BST, the shares were changing hands 2.97 percent higher at 192.20p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.18 percent down at 7,400.51 points. The group’s shares have added just under 13 percent to their value over the past year, but are down by some 14 percent in the year-to-date.
Reuters quoted Barclays’ chief executive Jes Staley as saying that he did not plan to increase capital allocated to the group’s corporate and investment bank, but to make use of about £20 billion from its corporate loan book that is delivering inadequate returns and by leveraging up its balance sheet after years of shrinking it.
“With our leverage ratio at 4.8 percent as at June 30, we are no longer leverage constrained. And that means there are compelling opportunities, with many clients [...] coming to us, looking for financing,” Staley told investors at a conference in New York last night, adding that that included in fixed income financing, where Staley argues that returns are attractive, Barclays has a high market share and it can drive revenues higher.
The 19 analysts offering 12-month price targets for Barclays for the Financial Times have a median target of 232.00p, with a high estimate of 265.00p and a low estimate of 175.00p. As of September 8, the consensus forecast amongst 23 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.