Is Barclays Lowballing Itself On Purpose?


Barclays said today that in spite of writedowns due to subprime, etc., it predicts that 2007 will exceed last year's profit, though just barely. Everyone (traders especially) thinks this is good news, and if we were talking about Citi it definitely would be, but making a pound more that least year means that Barclays earnings will have moved an insignificant 4 percent, compared to the gigantic growth seen in the last four years. Barclays's estimate is "broadly in line with" analysts' average estimate of about $14.7 billion (7.1 billion pounds), news which move the stock as much as 6.2 percent in London trading. Interesting. What I'm getting at is that Barclays is trying to cover up a record 75 percent increase in profit for 2007, so that whenever that actual numbers come out, they can say they "beat" analysts' expectations, and continue to recover from a 7-week losing streak. That or they're just trying to cushion the blow for the inevitable admission that those rumors about a $10 billion writedown were true. I can't decide which.
Barclays says on track for 4 pct 2007 profit rise [Reuters]
Barclays May Match 2006 Profit This Year [Bloomberg]


Layoffs Watch '12: Barclays

Cuts are said to have gone down with more a-comin'. Barclays PLC is cutting about 50 employees from its equities business, the latest effort by the British bank to reduce costs at its investment-banking arm. A week ago, the U.K. lender announced internally that about 10% of the jobs at its equities business across Europe, Africa and the Middle East would be lost, a person familiar with the matter said Friday. During the first half of the year, Barclays's equities and prime services business, which employs about 500 people, saw revenue fall 12% on the year to £973 million ($1.57 billion). The business has suffered as market volumes have dried up in recent quarters...The work-force reduction could be a taste of things to come for Barclays's investment bank. At the beginning of 2009, former Barclays Chief Executive Bob Diamond hired more than 400 bankers, mainly in equities and research, as part of a drive to turn the predominately debt-focused bank into a multi-asset powerhouse. Following Mr. Diamond's departure in the wake of a rate-fixing probe, new CEO Antony Jenkins has started a review of the bank's businesses to assess their profitability and whether and how they affect the lender's reputation. This, combined with tougher regulatory requirements, is expected to result in Barclays shrinking its investment bank, analysts say. Barclays To Cut 50 Equities Jobs [WSJ]