Barclays £11.6Bn profit

peterg1965

Barclays is now the UK's 2nd largest Bank. Are these enormous profits 'justified'?

I think they are good news for the UK, the tax revenue from these profits will be enornous and it gives a great fillip to the eventual recovery of the UK economy. John Varley the CEO, is sensitive to public opinion about bonuses, although £2Bn of the profits will be given back to employees in bonuses(!), but Diamond (CFO) and Varley are not taling anything.

Varley is tipped as a future BoE Governor under a Tory Government. He has steered Barclays thorugh the financial crisis, avoiding direct intervention form the UK taxpayer, although there is no doubt Barclays benefitted from the Govt bailout indirectly.

andygb

I was under the impression that Barclays was "bailed out" by Middle Eastern investors, who now hold roughly 30% of the shares. The capital loans will also have to be paid back at around 14% for the next ten years.
Every bank has benefited form the .5% interest rates, because they have failed to pass on any benefit to the customer. Savings rates have been cut, and mortgage rates have not fallen. Bank charges have increased, as have interest rates on credit cards, overdrafts and business loans.
Under these conditions, no bank should fail to make a huge profit, because we the taxpayer are bailing them out twice.

Jonbvn

Lets add some links for this!

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7248357/Barclays-profits-near-double-to-hit-11.6bn.html

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7028632.ece

£5.3bn sale of Barclays Global Investors accounts for a significant portion of the increased profits.

andygb wrote: »

Every bank has benefited form the .5% interest rates, because they have failed to pass on any benefit to the customer. Savings rates have been cut, and mortgage rates have not fallen. Bank charges have increased, as have interest rates on credit cards, overdrafts and business loans.

The increase is NOT due to any increase in profits from retail banking!

Generali

Treble bonuses all round! Thanks Bank of England!

StevieJ

peterg1965 wrote: »

Varley is tipped as a future BoE Governor under a Tory Government. He has steered Barclays thorugh the financial crisis, avoiding direct intervention form the UK taxpayer, although there is no doubt Barclays benefitted from the Govt bailout indirectly.

They were not a bad buy at £0.50p :beer:

StevieJ

andygb wrote: »

I was under the impression that Barclays was "bailed out" by Middle Eastern investors, who now hold roughly 30% of the shares. .

I don't think the Abu Jabis would be doing any bailing out unless it is for Dubai, they received very favourable treatment. A great number of Barclays shareholders at the time were not happy that a rights issue had not been made on the same terms.

bendix

What is the point of asking if these profits are justified or not? How can a profit be justified. It is either made as a result of the business doing well, or it isnt?

They received next to no Government money so why shouldn't a private company with shareholders in a highly competitive market strive to make whatever profits it likes?

Well done Barclays. I have accounts there and have never paid a penny in fees. I also own shares, so they are working very very well for me.

halight

Im glad that thay are doing well. We need our banks to make money!
If thay dont make a profit thay soon go bust and we all need banks open for bussiness

peterg1965

StevieJ wrote: »

They were not a bad buy at £0.50p :beer:

Good for you if you were in at 50p. I have played the 'what if' games in my mind as far as Barclays SP is concerned! It went up from 50p to 350p + very quickly, if I had a time machine I would take myself back to Jan 2009 and put my SIPP, ISAs and savings all in Barclays Shares...... Isn't hindsight a wonderful thing.....I would be sitting on a pretty penny now!

Jonbvn

bendix wrote: »

What is the point of asking if these profits are justified or not? How can a profit be justified. It is either made as a result of the business doing well, or it isnt?

They received next to no Government money so why shouldn't a private company with shareholders in a highly competitive market strive to make whatever profits it likes?

Bendix,

It is no where near as clear cut as you state. Barclays could not be allowed to fail. Although they did not take tax-payers money directly, there was an implicit gov't guarantee rather than a explicit one.

They have also made a lot of money from QE. Again benefiting from indirect assistance.

Jonbvn

peterg1965 wrote: »

Good for you if you were in at 50p. I have played the 'what if' games in my mind as far as Barclays SP is concerned! It went up from 50p to 350p + very quickly, if I had a time machine I would take myself back to Jan 2009 and put my SIPP, ISAs and savings all in Barclays Shares...... Isn't hindsight a wonderful thing.....I would be sitting on a pretty penny now!

In my time machine I would only have gone back to last Friday morning, and today GBP128 million would have been split 3 ways!:beer: