Barclays Now "Fairly Valued" Say Analysts

Could this be a buying opportunity for UK investors in the bank?

Stephen Simko, CFA 31 July, 2013 | 12:17PM
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Barclays is one of the three largest banks in the United Kingdom and has expanded around the world. Its large market share in its entrenched businesses - retail and business banking, credit cards, and investment banking - helped the firm to generate hefty returns during the boom years.

Despite the financial crisis and the now-changed banking landscape, Barclays has continued to focus on high-profile but risky businesses such as investment banking through Barclays Capital (about half of pretax profits in 2011 and 2012, but 80% in 2010) and international retail and commercial banking.

As a result, it has struggled to bring compensation costs in line with revenue and has suffered embarrassing risk management lapses. We're hopeful that the recent Libor rate-rigging scandal will have a silver lining by prodding the bank to pull back from its riskiest activities.

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About Author

Stephen Simko, CFA  is a senior stock analyst at Morningstar.