Barclays share price: Bank seeks to allay pensions concerns
Barclays (LON:BARC) has sought to allay concerns that a likely contribution to its pension scheme could delay a rebuilding of the bank’s dividend, the Financial Times has reported. The news comes after the FTSE 100 group updated investors on its full-year performance last week when it trimmed its payout to shareholders.
Barclays’ share price has surged in today’s session, having added 1.52 percent to 229.95p as of 10:16 GMT, outperforming the benchmark FTSE 100 index which is currently 0.74 percent better off at 7,317.50 points. The group’s shares gained more than 45 percent over the past year, and are up by nearly three percent in the year-to-date.
The FT reported yesterday that Barclays’ finance director Tushar Morzaria had told analysts at a breakfast meeting in London yesterday that the bank was ‘comfortable’ that it had fully taken account of the likely pension costs in its capital projections for this year. Barclays is likely to make a £1.25-billion contribution to its main pension scheme later this year and investors have been concerned that the move could impede the lender from bringing its dividend back to the levels of two years ago, before the group slashed its payout to shareholders as part of its cost-cutting measures.
“We have had a plan agreed with the trustees of the pension scheme since our last triennial valuation in 2013, to make annual contributions to reduce the deficit,” the bank said, as quoted by the newspaper, adding that the pension contributions did not affect its “confidence in reaching our end state target in good time”.
Barclays updated investors on its full-year performance last week, reporting that its pre-tax profits had almost tripled. The bank, however, cut its payout to shareholders in half.
As of 10:51 GMT, Wednesday, 01 March, Barclays share price is 229.75p.