Barclays FY2019 earnings are ahead of analyst forecasts, boosted by a strong fourth quarter at its investment banking unit.
On the other hand, Barclays drops its profits target for fiscal 2020 of a 10% return on equity.
Group profit before tax in fiscal 2019 rises by 25% to £4.4bn. This includes an additional provision for PPI of £1.4bn.
Profit before tax, excluding litigation and conduct in fiscal 2019 is £6.2bn (2018: £5.7bn).
Barclays UK profit before tax was £1.0bn (2018: £2.0bn). But excluding litigation and conduct, 2019 Barclays UK profit before tax rises by 8.3% to £2.6bn (2018: £2.4bn).
Income is stable, as ongoing margin pressure is offset by continued growth in mortgages and deposits. Operating expenses decrease by 2% as cost efficiencies are partially offset by planned investment and inflation.
As a result there is a 1 percentage point improvement in the cost-income ratio to 55% (2018: 56%).
“2019 was another year of progress for Barclays,” says CEO Jes Staley. “It continues the positive momentum across our business and allowing us to increase returns to shareholders.”
Specifically, Barclays declares a final dividend of £0.06. This takes the full year dividend to £0.09, up 38% year-over-year. Furthermore, Barclays renews its goal of paying what it terms ‘progressive dividends’.
Barclays FY2019 retail banking highlights
The bank continues to rightsize its branch network. It ends 2019 with 963 UK branches, a net reduction of 95 outlets from a year ago.
Active mobile banking customers rise by 15% year-on-year to 8.4 million.
Barclays UK loans and advances rise by 3.2% to £193.7bn. Meantime, customer deposits rise by 3.6% to £205.5bn.
Less positive metrics include ongoing evidence of margin pressure. Barclays’ UK net interest margin drops by 14 basis points to 3.09%.
Barclays’s return on tangible equity for 2019 is 9% ahead of forecasts. But Barclays has been aiming for a return on tangible equity in excess of 9% for fiscal 2019.
Barclays share price is up by 12% in the past 12 months but dropped by 2% on release of its results.