Barclays backtracks: Previously predicted strong performance not going to materialize

British financial giant Barclays PLC (LON:BARC) has issued a warning today that the performance during the first quarter of its investment banking operations will not be likely to be in line with the strong performance that it experienced in March last year. Barclays, which operates the BARX e-trading platform and is a major interbank FX […]

British financial giant Barclays PLC (LON:BARC) has issued a warning today that the performance during the first quarter of its investment banking operations will not be likely to be in line with the strong performance that it experienced in March last year.

Barclays, which operates the BARX e-trading platform and is a major interbank FX participant, was the world’s second largest interbank FX dealer in 2014, with 15.7% of the global market share, however in 2015, the firm’s share had dropped to only 8.1% of the world’s interbank FX market.

Today, the bank made a statement which pointed toward corporate performance in March having been the particular bugbear for the entire quarter, stating that January and February’s performance had been “broadly in line” with last year’s performance over the same period, however the bank “does not expect as strong a performance from its investment banking operations” as was achieved in March 2015.

The first quarter of last year was refreshing for Barclays, which, during 2014 had experienced not only a downturn in market share by almost 50%, but had considered the redundancy of some 19,000 employees worldwide, 5,000 of which were from the investment banking division.

On the cards for the immediate future is a potential conclusion of the firm’s proposal to sell its African entire African operations, representing another step toward retracting its operations to within London’s heartlands following the sale of the firm’s Spanish operations in September 2014 to CaixaBank for £632 million and the offloading of Barclays’ Italian operations to Mediobanca’s retail division OneBanca! in December 2015, however in that particular transaction, Barclays actually had to pay OneBanca! £200 million to take the Italian operations off its hands.

Other regions in Europe, including Portugal, make up regions from which Barclays has pulled its operations, and concentrated on its institutional business in London, however the European and African retreats represent retail banking divisions of the company, whereas London is largely investment banking including interbank FX trading, and with flagging performance and the hit still being felt from the regulatory censuring for Barclays’ part in the FX rate rigging case which drew to a close in November 2014, dividends have been cut and share prices are on the wane.

Capture

Chart courtesy of Google Finance. Photograph: Barclays stands tall among financial giants in its homelands at Canary Wharf, London E14

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