Barclays Leaps as Advisory Powerhouse to Record Annual Profits By

© Reuters.

By Dhirendra Tripathi – Barclays (NYSE:) ADRs traded up 3.5% pre-market on Wednesday after the lender reported its highest-ever annual profit, boosting demand for its banking services investment and merger advisory.

Added to the share’s gains is its decision to buy back £1bn ($1.36bn) of its own shares and pay an annual dividend of 4p per share, resulting in a total payout for the year of 2.5 billion pounds. ($3.4 billion) when added to past payments.

In the fourth quarter, revenue from capital markets and merger advisory services rose 27% to 956 million pounds as companies, loaded with cash, sought to buy more to fill gaps or expand into new geographic areas.

Quarterly profit attributable to Barclays shareholders increased more than fivefold to 1.1 billion pounds ($1.5 billion). Barclays, like rival HSBC (NYSE:) and US banks like JPMorgan (NYSE:) and Goldman Sachs (NYSE:), benefited from an improving economic climate. As asset quality improved, it freed up more funds that it had kept in reserve for contingencies. HSBC on Tuesday reported quarterly profit of $2 billion for its latest quarter.

Fixed income trading revenue fell 33%, driven by higher government bond yields. Equity earnings fell 8% in a volatile fourth quarter for the markets.

It was CS Venkatakrishnan’s first quarterly result as CEO of the bank and he said he would continue his predecessor Jes Staley’s focus on expanding investment banking, according to Reuters.

He listed digitization projects such as a “buy now, pay later” consumer credit offer with Amazon (NASDAQ:) in Britain and Germany, and the transition to a low-carbon economy. like his other priorities.

Echoing rivals Natwest (NYSE:) and HSBC, Barclays also warned of inflationary pressures in the current year.

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