Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a653032
Do investment bank job cuts make Barclays a buy opportunity?
by Dylan Lobo on Jan 23, 2013 at 13:51
Gordon expresses ‘incredulity’ that at the start of the year the sell-side consensus predicted Barcap costs would rise from £7.2 billion in 2012 to £7.5 billion in 2014, versus his expectation of costs falling to £6.8 billion over the next two years.
'Given an expectation of a reduction in both overall headcount and cost per head, we regard this as unrealistic and expect Barclays to deliver a much more shareholder-friendly, (and politically expedient), outturn,' he said.
However, Gordon was more cautious on those who believe its investment bank arm will continue to rake in revenues as others pull out of the sector.
‘Despite an assumption that Barcap will continue to enjoy ongoing market share gains as others retrench and/or exit, we do expect a modest adverse revenue impact in 2013e (as much driven by industry evolution as headcount rationalisation),’ Gordon said.
‘Indeed, our 2014e Barcap revenue forecasts are down 1% versus 2012e. Consensus is more optimistic, and such optimism supports a recent crop of quite frothy target price inflation.’
News sponsored by:
Today's top headlines
More about this:
Look up the shares
More from us
- Barclays wealth COO exits after 'out of control' claim in secret report
- 'Deeply disappointed' Diamond quits Barclays - as Agius returns
- Barclays eyes 2,000 job cuts in investment arm overhaul
- Barclays staff to be shown door if they shun its moral mission
Aberdeen Live supplement: Fundamentals point to ongoing flows and solid returns from EMD
After a record year for inflows and market-leading performance in 2012, emerging market debt has taken a large step towards the mainstream. Our recent debate covers the outlook for the asset class this year and where opportunities can be found.
On the road
on May 24, 2013 at 11:32