Barclays (LON: BARC) share price slid by 5.28%, to 153.32p, as the UK Bank announced its second-quarter results last Thursday. The report showed a net income of £1.3 billion, which aligns with what the analysts expected. On Monday, the shares are showing a slight recovery and were changing hands at 156.06p till press time.
The UK lender showed increased revenue from its performance in the domestic division, up to 14% in the second quarter. However, the investment bank suffered a 22% decrease in revenue, for which the bank blamed lower client activity.
The chief executive of Barclays, C. S. Venkatakrishnan, told NBC that they expect a significant reduction in their net interest margin in the UK as customers are using their savings to pay off their mortgages. Analysts have predicted that the net interest margins will fall from 3.2% to 3.15%. Side by side, the deposits in the UK also fell by 2% in the second quarter.
Barclays also reported a 6% reduction in their total revenue, from £6.7 billion to £6.3 billion. The bank also mentioned a share buyback of £750 Million. This move is being considered a silver lining by several analysts as the buyback will help the Barclays share price to increase.
The following LON: BARC shows that its share has dropped below the midpoint of the range and the 200 Moving Average. The sell-off can be attributed to the underwhelming Q2 report. In my previous analysis, I mentioned how there is a confluence of the trendline and 200 MA at 159p, suggesting a strong supply zone in that region. After the earnings, the shares failed to hold this zone and are now consolidating below it.
Barclays share price forecast is not looking very bullish after breaking down below the key level. As a result, there is a strong likelihood for the price to retest the bottom of the range, which lies at 140p. The only way to avoid this fate is to reclaim the 200-moving average and the midpoint of the range.
In the meantime, I’ll keep sharing the updated Barclays stock forecast and my personal trades on my Twitter, where you are welcome to follow me.
This post was last modified on %s = human-readable time difference 15:08