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Barclays (BCS) Dips as Qatar's Wealth Fund Sells Half Its Stake
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Shares of Barclays PLC (BCS - Free Report) have lost 4.9% on the NYSE since Qatar’s wealth fund sold almost half of its stake in the British bank. According to the terms of the offering seen by Bloomberg, Qatar Holding LLC, owned by Qatar Investment Authority (“QIA”) sold 361.7 million shares in Barclays, raising £510 million.
Notably, Qatar became the largest shareholder of Barclays during the 2008 financial crisis when it injected £4 billion into the British bank to help it prevent a state bailout.
While Qatar’s above-mentioned intervention helped BCS avoid a government bailout, the emergency fund-raising has been a legal headache ever since.
In 2022, the Financial Conduct Authority announced its plans of fining Barclays £50 million for failing to disclose an agreement to pay advisory fees to Qatari investment vehicles during the fund-raising efforts.
While the Middle Eastern state remains a significant shareholder of Barclays, its decision to slash support for the bank comes as a surprise, adding pressure on CEO C.S. Venkatakrishnan, months before he discloses a new strategy for the bank.
Notably, Venkatakrishnan is overhauling Barclays in an effort to boost the company’s performance.
Last month, it was reported that BCS plans to lay off up to 2,000 staff across its legal, compliance and human resource divisions to reduce expenses by $1.25 billion (around 7% of total operating costs incurred in 2022).
Also, its investment bank is planning to axe thousands of unprofitable clients, including sovereign wealth funds, governments and large institutional investors.
Moreover, in sync with its strategy to improve market share in the U.K., Barclays also seems interested in acquiring Edinburgh-based Tesco Bank.
According to a report by Reuters, citing people familiar with the matter, BCS seems to have already made a bid for Tesco Bank, formed in 1997 through a 50-50 joint venture between Royal Bank of Scotland (now known as NatWest Group plc) and Britain’s large food retailer Tesco Plc. In 2008, Tesco Plc took full ownership of the venture.
Barclays is primarily interested in Tesco Bank’s credit card and savings account products. The deal offers an opportunity to cross-sell products to Tesco Plc’s huge retail customer base.
The above-mentioned efforts taken by Venkatakrishnan are expected to boost Barclays’ share price, which has fallen 9.7% on the NYSE year to date against the industry’s 13.4% growth.
In order to remain profitable amid the high interest rate environment and navigate their way through the current tough economic backdrop, finance firms across the globe have been undertaking several restructuring efforts, majorly job cuts.
Last month, Citigroup Inc. (C - Free Report) commenced the elimination of various job positions as part of its major organizational overhaul process. The job cuts involved approximately 10% of Citigroup’s senior manager roles aggregating to around 300 managers.
According to C’s press release, “Today we shared with our colleagues the next layer of changes across many of our businesses and functions as we continue to align Citi’s organizational structure with our new, simplified operating model. As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients”.
In an effort to streamline business operations, Ally Financial Inc. (ALLY - Free Report) started trimming its workforce, a move that is expected to impact less than 5% of ALLY’s overall headcount.
Spokesperson Peter Gilchrist said in an emailed statement that the workforce reduction would occur across divisions and is not restricted to a single line of business.
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Barclays (BCS) Dips as Qatar's Wealth Fund Sells Half Its Stake
Shares of Barclays PLC (BCS - Free Report) have lost 4.9% on the NYSE since Qatar’s wealth fund sold almost half of its stake in the British bank. According to the terms of the offering seen by Bloomberg, Qatar Holding LLC, owned by Qatar Investment Authority (“QIA”) sold 361.7 million shares in Barclays, raising £510 million.
Notably, Qatar became the largest shareholder of Barclays during the 2008 financial crisis when it injected £4 billion into the British bank to help it prevent a state bailout.
While Qatar’s above-mentioned intervention helped BCS avoid a government bailout, the emergency fund-raising has been a legal headache ever since.
In 2022, the Financial Conduct Authority announced its plans of fining Barclays £50 million for failing to disclose an agreement to pay advisory fees to Qatari investment vehicles during the fund-raising efforts.
While the Middle Eastern state remains a significant shareholder of Barclays, its decision to slash support for the bank comes as a surprise, adding pressure on CEO C.S. Venkatakrishnan, months before he discloses a new strategy for the bank.
Notably, Venkatakrishnan is overhauling Barclays in an effort to boost the company’s performance.
Last month, it was reported that BCS plans to lay off up to 2,000 staff across its legal, compliance and human resource divisions to reduce expenses by $1.25 billion (around 7% of total operating costs incurred in 2022).
Also, its investment bank is planning to axe thousands of unprofitable clients, including sovereign wealth funds, governments and large institutional investors.
Moreover, in sync with its strategy to improve market share in the U.K., Barclays also seems interested in acquiring Edinburgh-based Tesco Bank.
According to a report by Reuters, citing people familiar with the matter, BCS seems to have already made a bid for Tesco Bank, formed in 1997 through a 50-50 joint venture between Royal Bank of Scotland (now known as NatWest Group plc) and Britain’s large food retailer Tesco Plc. In 2008, Tesco Plc took full ownership of the venture.
Barclays is primarily interested in Tesco Bank’s credit card and savings account products. The deal offers an opportunity to cross-sell products to Tesco Plc’s huge retail customer base.
The above-mentioned efforts taken by Venkatakrishnan are expected to boost Barclays’ share price, which has fallen 9.7% on the NYSE year to date against the industry’s 13.4% growth.
Image Source: Zacks Investment Research
Currently, BCS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In order to remain profitable amid the high interest rate environment and navigate their way through the current tough economic backdrop, finance firms across the globe have been undertaking several restructuring efforts, majorly job cuts.
Last month, Citigroup Inc. (C - Free Report) commenced the elimination of various job positions as part of its major organizational overhaul process. The job cuts involved approximately 10% of Citigroup’s senior manager roles aggregating to around 300 managers.
According to C’s press release, “Today we shared with our colleagues the next layer of changes across many of our businesses and functions as we continue to align Citi’s organizational structure with our new, simplified operating model. As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients”.
In an effort to streamline business operations, Ally Financial Inc. (ALLY - Free Report) started trimming its workforce, a move that is expected to impact less than 5% of ALLY’s overall headcount.
Spokesperson Peter Gilchrist said in an emailed statement that the workforce reduction would occur across divisions and is not restricted to a single line of business.