Barclays plc: Hargreaves Lansdown maintain BARC at a cautious buy as bank resolves issues as quickly as possible

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Category: Financials

Published on Friday, 27 July 2012 10:48

Written by Will Peters

Barclays plc (LON:BARC) is a 'cautious buy' at stockbroker Hargreaves Lansdown who have expressed approval over the  strides taken by the bank to move through a host of political and regulatory woes.

Investors this morning welcome the news that Barclays made 4.227bn GBP in pre-tax profits for the half, up 13 percent from the same period last year and beating analysts’ estimates.

Crucially, the figure includes the 290m GBP fine levied on Barclays by the FSA, meaning the health of operations are not deteriorating.


Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers says:

"Credit is due to Barclays, where the growing list of political and regulatory woes seem to have done relatively little to stem the bank's financial progress.

"Naturally the wholesale change of personnel at the top will provide the potential for some reduction in focus, whilst the ultimate fallout from the LIBOR situation, where future litigation is surely a possibility, remains unknown.

"Meanwhile, the combination of the PPI mis-selling, interest rate swaps and LIBOR fines have provided a toxic cocktail in both financial and reputational terms.

"Nonetheless, the company remains committed to repairing each of these individually and, in the meantime, has produced results which are extremely robust given the distractions. The key metrics have, on the whole, shown a meaningful improvement, including the beleaguered Barclays Capital, which has fared quite strongly as compared to its rivals.

"The relief rally being seen in early trade is an acknowledgement of this robust update, although it comes in the context of a 28% fall in the share price in the last three months alone, during which period the wider FTSE100 has dropped 4%.

"There may be further trouble ahead, but Barclays seems to be dealing with its issues as quickly as possible, which gives some hope to the general market view of the shares as a cautious buy remaining in place."