FTSE 100 set to slip as US returns from holiday, Barclays and IHG launch buybacks
Looking deeper at the Barclays PLC (LSE:BARC) results and strategy update, the blue-eagle bank’s new three-year plan includes an aim to pay out £10 billion in shareholder returns while crimping costs.
Chief executive CS Venkatakrishnan is looking to boost returns above 12%, from a return on tangible equity of 9% last year, in part by reducing costs by £2 billion by 2026.
A shake-up of its corporate structure includes splitting operations into five new divisions to provide a more “granular disclosure of the performance”.
Going forward, it plans to marry these changes to enhanced shareholder returns although will keep the dividend flat at 2023 levels and increase the payment per share via stock repurchases.
A new £1 billion buyback was announced alongside results, where annual profits fell by £400 million to £6.6 billion.
“Our new three-year plan, which we will be announcing at the investor update today, is designed to further improve Barclays’ operational and financial performance, driving higher returns, and predictable, attractive shareholder distributions,” said Venkatakrishnan.
7.16am: FTSE 100 tipped to slip
The FTSE 100 is expected to retreat in early trading on Tuesday after nudging six-week highs in recent sessions, with global financial market volumes set to be boosted today as US investors return after a long weekend.
London’s blue-chip index is seen falling around eight points, according to spread-betting platforms, after adding just under 17 points to close at 7,728.5 the day before.
Elsewhere, Asian stocks mostly fought back after earlier slides after the Chinese central bank cut the major loan rate for most mortgages for the first time since last June, and more than expected.
Japan’s Nikkei is the only major index in the red.
Early stock market moves in London could be dictated by the banking sector as Barclays announced a £1 billion share buyback, notified of its new operating division structure and promised to go on a major cost-cutting drive over the next three years.
Holiday Inn owner Intercontinental Hotels Group PLC (LSE:IHG) could be among the FTSE risers after it said it aims to return more than $1 billion to shareholders this year, including $800 million in share buybacks.
