Barclays shares drop like a stone after shock news

MrHarris

There’s no bigger story in the markets today…

Barclay's latest results have caused shockwaves in the City.

Put simply, profits are down but bonuses are up.

The shares are the worst performer in the FTSE 100, down around 5%.

Archi_Bald

Any thoughts on how this links to the suicides?

https://forums.moneysavingexpert.com/discussion/4892091

BTW, the FTSE100 was up almost 1% on yesterday at lunchtime.

berbatov10

I was thinking about buying some Barclays shares. Question is does this make it a better buy opportunity or the start of a bigger fall? I have to say the charman should be sacked for upping bonuses and giving such derisory saving rates.

Archi_Bald

berbatov10 wrote: »

I have to say the charman should be sacked for upping bonuses and giving such derisory saving rates.

Could that be the reason for why he is the chairman and you aren't?

berbatov10

Archi bald you make a fine point Sir, question is should I buy Hmmm

talexuser

The question that confuses me is why the owners of the business are quite happy to have significant losses while the bonus pool is three times bigger than the dividend pool.

bigadaj

Barclays are one of the worst banks in terms of shareholder return, the vast majority of profits generated are returned to staff rather than shareholders, so not exactly a clear and valid reason for investing in them.

It could of course be argued that they avoided public money, unlike rbs and lloyds group, though there is the underlying government guarantees that all the banks have benefitted from, but they did have to do the Middle East deal which cost traditional shareholders a large amount of money.

I've no problem with capitalism in tooth and claw but when the returns are so poor as at Barclays then surely they just simply aren't a good investment.

le_loup

bigadaj wrote: »

the vast majority of profits generated are returned to staff rather than shareholders

Not at all unusual in the world of investment banking. Look at Goldman Sachs!

bigadaj

le_loup wrote: »

Not at all unusual in the world of investment banking. Look at Goldman Sachs!

Though in defence of Goldman Sachs (I just wanted to say that as I don't believe it's a phrase ever rendered before by a non employee) I believe they were a partnership that subsequently converted, so shares either held by employees or at least people who were aware of the situation, and of course a non retail bank.

I love playing devils advocate, but in this case more looking like the devil!

grizzly1911

I am surprised that Jenkins has allowed such an own goal.

He committed to reducing compensation in IB division to 35% from around 39% and this has pushed it to 42%. If they need to pay this level of compensation to the "magic" few then drop the dross first not afterwards.

They argue that they have to offer compensation packages based on global rates to obtain the best. The results in the investment banking division are down 11%.

I am not surprised that the markets are hammering the shares. Shareholder returns are derisory and whilst there may be a long term strategy, time after time the bonuses get stoked. It doesn't help that in being forced into the rights issue returns have been diluted.

Many banks chased Goldman Sachs in the run up to the last collapse and failed, not sure they are the best example to use. For them to make the returns they did many more got severely burned.

Thrugelmir

berbatov10 wrote: »

I was thinking about buying some Barclays shares. Question is does this make it a better buy opportunity or the start of a bigger fall? I have to say the charman should be sacked for upping bonuses and giving such derisory saving rates.

Legacy of Bob Diamonds day. Bonus payments will be contractual. So nothing Barclays can do at the current time. Except make 470 bankers redundant. That'll make a sizable saving in a few years time.