Barclays bank results show surprising strength, boosting investor confidence

Barclays (LON:BARC) bank revealed a surprising increase a key measure of financial strength on Thursday, causing shares to rise over 3 percent.

Faster-than-expected sales of unwanted assets let to the bank’s core capital ratio rising to 12.4 percent, above analysts expectations of 11.8 percent. Chief Executive Jes Staley confirmed that the bank was no longer looking to raise funds, or sell off further assets.

Barclays’ profit before tax rose to £3.2 billion for 2016 – lower than anticipated, but nearly treble £1.1 billion figure the year before.

In a statement, Staley said: “We are well positioned to absorb headwinds over the next few years. Certain legacy conduct issues remain and we intend to make further progress on them.”

He added that the bank was committed to the UK post-Brexit, and did not anticipate moving operations abroad ahead of Article 50 negotiations. However, he added the bank was preparing to add hundreds of staff to its offices in Dublin, Frankfurt and Milan in order to mitigate risks.

“We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond”, Staley concluded.

Investment bank revenues rose 21 percent on the year before to £2.5 billion, after a stronger-than-expected performance in the second half of 2016.

The bank also benefitted from lower litigation and misconduct charges in 2016, which fell to £1.3 billion from £4.4 billion the previous year.

Despite initially spiking after the announcement, shares in Barclays bank are currently trading down 2.66 percent at 228.90 (1535GMT).