Analysts have weighed in on Barclays (LON:BARC) which is set to become Europe’s only investment bank as German peer Deutsche Bank unveiled plans to exit its equities trading business. The German lender confirmed yesterday that would exit its Equities Sales & Trading business and implement a cost reduction programme which will see it take about a €3-billion charge in the second quarter of the year and shed thousands of jobs.
Barclays’ share price has been subdued in London in today’s session, having given up 0.65 percent to 156.20p as of 14:29 BST, and underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.07 percent lower at 7,547.77 points. Deutsche Bank’s share price meanwhile is down by more than five percent in Frankfurt, with analysts and investors mulling over the update.
‘Good news’ for Barclays
Proactive Investors quoted Neil Wilson, chief market analyst at Markets.com, as commenting that Deutsche Bank’s woes spelled ‘good news’ for Barclays, adding that the London-listed lender was ‘the only one’ left standing among Europe’s investment banks who have tried to take on the US giants on Wall Street. He further reckons that Deutsche’s exit left the US investment banks, which include ‘bulge bracket’ titans such as JP Morgan Chase & Co and Citigroup Inc firmly ‘in charge’ for the foreseeable future.
Analyst ratings update
Royal Bank of Canada, which is ‘neutral’ on the FTSE 100 lender, set a target on the Barclays share price of 180p last week. According to MarketBeat, the London-listed group currently has a consensus ‘buy’ rating and an average valuation of 212.50p.
Today’s update comes after the Competition and Markets Authority censured Barclays last week as the lender broke rules designed to protect small businesses. The FTSE 100 company is scheduled to update investors on its half-year performance on August 1.
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.