Barclays share price slump said to be caused by profit fears
Concerns about earnings, rather than capital or liquidity, have caused the hefty fall in Barclays’ (LON:BARC) shares in the aftermath of the Brexit vote, Bloomberg has reported, quoting the lender’s chief executive Jes Staley. The Telegraph meanwhile quoted the lender’s chairman John McFarlane as saying that the FTSE 100 group currently had no plans to move jobs following the outcome of the referendum.
Barclays’ share price has fallen into the red this morning, having shed 0.97 percent to 137.25p as of 09:20 BST, underperforming the benchmark FTSE 100 index which has climbed into positive territory and currently stands 0.32 percent higher at 6,525.43 points. The group’s shares have lost more than 48 percent of their value over the past year, and are down by over 37 percent in the year-to-date.
Barclays’ chief executive Jes Staley said in a Bloomberg Television interview with Erik Schatzker yesterday that concern about earnings, rather than capital or liquidity, had caused the ‘significant’ dip in the lender’s shares after the UK voted to leave the European Union.
“We got no sense of concern about our capital nor liquidity, and properly so, but there is a concern about our earnings,” Staley said, adding that the share price slump was “being driven by concern about the UK economy going forward and concern about our investment bank, if in fact there is a challenge between EU and London as a financial centre”.
Despite concerns whether Barclays will be allowed to continue doing business across the EU from the UK, the group’s chairman John McFarlane noted that the group had no plans to move jobs because of the referendum result.
“We do have branches across Europe and we have banks in the EU, so we have flexibility to do whatever we want, but we will not trigger that unless it was absolutely necessary,” he commented yesterday, as quoted by The Telegraph. The newspaper noted that while one possibility would be to use Barclays’ Irish banking licence to move staff to Dublin, McFarlane had confirmed there would be no movement for the time being.
As of 09:54 BST, Friday, 01 July, Barclays share price is 137.50p.
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