Financial Results
Barclays Unveils New Divisional Structure, 2023 Financial Results; Shares Rise
The UK lender has a new divisional structure, with a private bank and wealth management unit as part of the change. It also announced financial results, showing a drop in pre-tax profit but a gain in total income.
UK-listed Barclays,
which today announced 2023 financial results, also unveiled a
management structure shakeup and new operating
divisions.
The lender said it will now have five operating divisions:
Barclays UK; Barclays UK Corporate Bank; Barclays Private Bank
and Wealth Management; Barclays Investment Bank; and Barclays US
Consumer Bank.
For almost a decade, the UK bank hasn’t disclosed the financial
results – such as its assets under management – at the wealth and
investment division. In its statement today, however, Barclays
said its segmental reporting will “reflect these five operating
divisions, in addition to head office, from the first quarter of
2024.”
The divisions will be led by the following: Vim Maru has been
appointed CEO of Barclays UK; Matt Hammerstein has been appointed
CEO of Barclays UK Corporate Bank. In addition to his leadership
of UK Corporate Bank, Hammerstein will replace Sasha Wiggins as
the head of public policy and corporate responsibility; Sasha
Wiggins is appointed CEO of Barclays Private Bank & Wealth
Management; and Denny Nealon will continue as CEO of Barclays US
Consumer Bank and Barclays Bank Delaware.
The Investment Bank operating division will be co-led as follows
(also subject to regulatory approval in respect of new
appointments, as appropriate): Adeel Khan has been appointed
sole head of global markets; Cathal Deasy and Taylor Wright will
continue as co-heads of banking; and Stephen Dainton has been
appointed president of Barclays Bank PLC and head of investment
bank management.
Each of the divisional and business heads above will be members
of Barclays’ group executive committee, and report to the group
chief executive, C S Venkatakrishnan. Paul Compton will step back
from his role as the global head of the CIB (corporate and
investment bank) and president of Barclays Bank PLC and will
become the chairman of investment Banking, also reporting to the
group CEO.
Results
Barclays logged a pre-tax profit of £6.557 billion ($8.25
billion) in 2023, falling from £7.012 billion in 2022;
attributable profit was £4.274 billion, down 15 per cent on a
year before. Total income rose 2 per cent to £25.378 billion;
total operating costs rose to £16.714 billion, rising 12 per cent
year-on-year; total operating expenses rose to £16.931 billion
from £16.73 billion. The bank’s cost/income ratio held steady at
67 per cent.
Barclays' strategy includes cutting £2 billion pounds of costs,
and returning £10 billion to shareholders. Shares rose on the
results, with prices up as much as 7 per cent at one point during
the morning.
In other figures, return on average tangible shareholders’ equity
dipped to 9 per cent, down from 10.4 per cent. Last year,
Barclays announced £1.75 billion of share buybacks, up from £1
billion in 2022. At the end of 2023, Barclays had a Common Equity
Tier 1 capital ratio – a bank’s “shock absorber” – of 13.8 per
cent, down from 14 per cent in 2022.
Last year, Barclays combined the private bank and Barclays UK
wealth business: on 1 May 2023, WM&I was transferred,
creating a combined private bank and wealth management business.
“The combination seeks to improve customer and client experience
and create business synergies,” the lender said. The business
transferred includes about £28 billion of invested assets, it
said.
"In 2023 Barclays delivered solid performance against a mixed
macroeconomic backdrop, meeting its financial targets. Our new
three-year plan…is designed to further improve Barclays'
operational and financial performance, driving higher returns,
and predictable, attractive shareholder distributions,”
Venkatakrishnan said.
Among other details, Barclays said its group net interest income
rose 20 per cent in 2023 to £12.7 billion.