By
Godfrey Benjamin
November 15th, 2023
Barclays mentioned a net attributable loss of about £600 million related to the over-issuance matter.
Although British multinational universal bank Barclays (LON: BARC) beat consensus expectations in its net profit for 2022, the figures fell short compared to the same period in the previous year. According to the full-year report released on Wednesday, Barclays said net profit for 2022 was £5.023 million ($6.07 billion), exceeding the predicted £4.95 billion. However, the net profit was lower than 2021’s £6.2 billion.
Barclays noted that a costly trading blunder in the US partly caused the YoY decline in net profit. Also, attributable profit for Q4 2022 surpassed analyst projections of £833.29 million at £1.04 million. While it beat expectations, it is a decline from £1.08 billion generated in Q4 2021. The bank also posted 13.9% for its common equity tier one capital (CET1), compared to 13.8% in Q3 and 15.1% in Q4 2021. While the return on tangible equity (ROTE) arrived at 12.5% in Q3 and 13.4% in Q4 2021, Barclays stated that the ROTE in Q4 2022 was 8.9%. In addition, the full-year net interest margin (NIM) was also 2.86%, surpassing the 2.52% posted in full-year 2021. After booking £700 million in credit impairment provisions in 2021, the bank booked £1.2 billion in 2022.
Last month, Barclays revealed that it had gone beyond its permission to sell structured notes. The company said it had some $15.2 billion more in US investment products than permitted. Therefore, the bak postponed its share buyback program indefinitely while it became a subject of an investigation by US regulators. It promised to resume its share buyback program as soon as the agency reaches a resolution. Eventually, the over-issuance cost Barclays a total of £1.6 billion in 2022. The bank had to deal with litigation and conduct charges, resulting in a profit decline in 2022 H1.
Furthermore, the company mentioned a net attributable loss of about £600 million related to the over-issuance matter. The loss included a $200 monetary penalty after the SEC probe. Regardless, Barclays CEO C.S Venkatakrishnan said the team had a strong performance in 2022.
“Each business delivered income growth, with Group income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders. We are cautious about global economic conditions, but continue to see growth opportunities across our business through 2023.”
The British bank has declared 7.25 pence per share on the total dividend for 2022. Meanwhile, it announced a total dividend for 2021 of 6 pence per share.
