Barclays is under intense pressure from shareholders to bring forward its full-year results after a profits forecast last week failed to prevent further big falls in the bank's share price.
The stock fell for the sixth straight day yesterday – by 17 per cent – and has lost 60 per cent of its value since Monday. Meanwhile, Lloyds Banking Group sought to reassure investors that its capital position was strong after its shares fell by more than 30 per cent on another grim day for the banking sector.
On Friday, Barclays was forced to issue a statement saying its full-year profits would be "well ahead" of analysts' forecasts of £5.3bn after its shares lost a quarter of their value in the final hour of trading. Investors are understood to have contacted the bank and urged it to announce audited results, due on 17 February, as soon as possible to ease fears about credit market write-downs at the Barclays Capital investment bank.
Royal Bank of Scotland stunned the City on Monday when it said it was heading for a record loss of £28bn, warning that there would be more to come with markets in a renewed state of turmoil. One institutional investor in Barclays said: "Investors are saying [in the share price] that they don't believe what the management put out on Friday. The management is in denial and this could be RBS mark two. They will be under a lot of pressure from shareholders, the regulators and the Treasury." The investor said Barclays had to act quickly to stop its share price plunging again, which would further undermine confidence in the bank. The Government had to inject capital into the sector in October to stop a spiralling collapse of faith in RBS and HBOS.
Barclays has faced constant questions about the values it attaches to the assets on its books, particularly loans made for leveraged buy-outs, which it has insisted are good quality and will be paid back if held to maturity. Shareholders fear Barclays and Lloyds could be nationalised if losses from credit investments or bad debts wipe out their capital buffers.
A spokesman for Barclays said its full-year results were still scheduled for 17 February and declined to comment further. Its shares closed at 72.9p.
After gaining in morning trading, RBS shares fell by 11 per cent to 10.3p as fears of full nationalisation continued to grip shareholders. Confidence in the sector was again undermined when US analysts said Bank of America might need an $80bn capital injection. The bank sparked panic last week when it announced big losses in credit markets. The Bank of New York Mellon brought forward its fourth-quarter results from Thursday after its shares lost nearly a third of their value yesterday.
Lloyds was the biggest faller in the UK banking sector, dropping 31 per cent to 44.8p, despite issuing a statement on Monday saying it was trading broadly in line with previous guidance. The bank, formed from the takeover of HBOS by Lloyds TSB on Monday, sought to reassure the market again yesterday. "We have a robust capital position and a strong business model," a spokesman said. "We estimate our core tier-one capital ratio, a key measure, as at 31 December would be within our previously announced target range of 6-7 per cent."
He would not say if Lloyds would bring its results forward from 27 February.Reuse content