Must read: UK earnings, BP, Standard Chartered, Barclays

Global markets 

The FTSE 100 has opened lower, dragged down by shares in BP (LSE:BP.) which have sunk towards the bottom of the index after suspending its share buyback as part of its financial results. Its quarter profit met analysts’ expectations, hitting $1.54 billion, but there was a $4 billion write down in its renewables and biogas businesses. 

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Standard Chartered (LSE:STAN) is also weighing on the FTSE 100, suffering considerable losses after the bank’s CFO Diego De Giorgi unexpectedly announced plans to step down immediately, moving over to Apollo. 

UK housebuilders are performing well today, among them Persimmon (LSE:PSN) and Barratt Redrow (LSE:BTRW) on the FTSE 100 after Bellway (LSE:BWY) said there are "clear signs of improving demand" in its results. Croda International (LSE:CRDA) has surged to the top of the FTSE 100 thanks to some broker upgrades – Goldman Sachs and JP Morgan both raised their target prices on the stock. 

The Takaichi trade is supercharging Japanese equities – the Nikkei closed higher again, gaining 2.28% to log a record closing high. US futures are pointing to a flat open after a positive start to the week for Wall Street on Monday, with the Dow Jones logging fresh highs. Higher risk appetite is weighing on precious metals, with gold pulling back from one-week highs.

Barclays 

Barclays (LSE:BARC) reported full-year profit before tax of £9.1 billion, up 12% year-on-year, very slightly ahead of analysts’ expectations. The British lender said it plans to initiate a further share buyback of up to £1 billion, having announced a new £500 million buyback last quarter. The group had previously guided that its shareholder returns would be skewed more towards buybacks rather than a progressive dividend policy. 

It also announced new performance targets – Barclays is now aiming for a return on tangible equity of above 14% by 2028, a figure which hit 11.3% in 2025. And it is looking to return over £15 billion of capital to shareholders via dividends and buybacks by 2028. Barclays is also aiming to achieve cost savings of around £2 billion by 2028. 

Its investment banking (IB) division enjoyed a strong performance last year with total income up 11% including strong growth in global markets (15%) thanks to the volatile market backdrop supporting fixed income (16%) and equities (12%) trading, but growth was less impressive in investment banking (3%). Unlike big US rivals like Goldman Sachs and Morgan Stanley, Barclays didn’t see a mega bounce back in advisory activities such as M&A.  

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The more recent strength of the US dollar against sterling is something of a double-edged sword – Barclays noted dollar weakness adversely impacted income and profits but positively impacted credit impairment charges and operating expenses.  

The group has had a good run of late, and the shares have risen by around 60% over the last year supported by the higher for longer interest rate backdrop and solid returns to shareholders. Shares are responding mildly positively to today’s announcement. 

Barclays remains the preferred play in the UK banking sector by some distance with a consensus buy recommendation among analysts.