Banking sector still looks gloomy as Barclays announces poor results

1st March 2016


As Barclays reports its full year results Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…

Barclays has reported a 2% drop in underlying profits today, while also announcing that it will cut its dividend by more than half. These poor results have led the bank to accelerate its strategy to simplify the business, which include selling down a 62% stake in its Barclays Africa Group. This may please investors who have been looking to the new Chief Executive, Jes Staley, to take some significant steps to strengthen its operations.

Investors will note that Barclays will pay a final dividend of 3.5 pence per share, giving a total of 6.5 pence per share for 2015 financial year. It expects to pay a dividend of 3 pence per share in 2016 and 2017.

With the sector still under a cloud, the share price close to a three year low and the uncertainty over the investment banking division, we view the stock as no more than a hold for the time being.