Shares of the FTSE 100-listed Barclays PLC (GB:BARC) rallied nearly 6% after the bank announced a major strategic revamp, targeting cost savings of £2 billion by 2026. The new three-year plan comes alongside Barclays’ annual results for 2023, with the aim of reviving its share price growth and enhancing overall profitability. The bank added that it would reorganise its business into five new operating divisions to ensure clearer disclosure and more accountability.
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Barclays ranks among the top four banks in the UK, serving approximately 48 million customers globally.
Major Overhaul Along With Low-Key Results
Through this new plan, Barclays’ Chief Executive Officer, C. S. Venkatakrishnan, aims to improve the bank’s operational and financial performance, along with attracting investors with appealing shareholder distributions. The move comes following a period of management upheaval and lacklustre performance.
Barclays plans to return at least £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks.
Speaking of 2023 numbers, Barclays reported a 6% decrease in its annual profit to £6.6 billion, consistent with analysts’ projections. The bottom line was impacted by charges for potential bad loans. For the full year, net attributable profit came in at £4.27 billion on a statutory basis, falling below the analysts’ consensus of £4.59 billion.
The bank’s statutory return on tangible equity (RoTE) stood at 9.0%, down from 10.4% in 2022. Barclays stated its intention to achieve a RoTE of over 10% in 2024, with targets escalating to more than 12% in 2026.
Is Barclays a Good Share to Buy?
On TipRanks, BARC stock has received a Strong Buy consensus rating, backed by seven Buys and one Sell recommendation. The Barclays share price forecast is 216.43p, which is 38.3% higher than the current trading level.
