Barclays PLC has faced a significant decline in share price over the past eight years, failing to meet the ambitious target set by former Chairman John McFarlane. When Antony Jenkins was removed from his position as CEO in July 2015, McFarlane aimed to double the bank's share price within three to four years. However, under the leadership of current CEO CS Venkatakrishnan, Barclays' shares have instead halved from 285p to 136p.
The bank's transatlantic business has notably underperformed, and despite this challenge, Venkatakrishnan plans to expand into other sectors such as credit cards and wealth management. This strategy is a departure from shrinking the investment bank, which has been a point of contention among investors. The dissatisfaction stems from what is perceived as inconsistent performance and a lack of clear strategic direction.
Investors are now looking toward the upcoming strategic review in February with concern. There is apprehension that the review may not sufficiently address issues related to the dominance of the investment banking division within Barclays. Should the new model fail to convince stakeholders, there could be heightened calls for a potential breakup of the bank. This sentiment reflects growing investor frustration and the critical juncture at which Barclays finds itself.
InvestingPro Insights
According to real-time data from InvestingPro, Barclays PLC (BARC) has a market capitalization of $25.3 billion as of Q3 2023. The company's P/E ratio stands at 3.94, indicating a low price relative to earnings. Barclays' revenue growth for Q3 2023 was 0.55%, with a quarterly revenue growth of 4.58%.
InvestingPro Tips highlight that Barclays has raised its dividend for three consecutive years, suggesting a commitment to returning capital to shareholders. The bank is also trading at a low Price / Book multiple, providing potential value for investors. Despite some analysts revising their earnings downwards for the upcoming period, Barclays remains a prominent player in the banking industry with predictions of profitability this year.
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