This is a guide for those interested in buying Barclays stock. The guide explores the history and profile of Barclays — including its business model and streams of revenue — as well as how to purchase the stock, the investing style that is suitable for investing in Barclays stock, and the best brokers that offer the stock.
Table of Contents
Learn How to buy Barclays stocks in 3 easy steps
Find a broker
Choosing a broker is as important as picking the right stocks to invest in. However, most investors do not apply the same due diligence when searching for a broker to register with. Here are the parameters you can use to evaluate brokers: security, user experience, fees, and commissions, and research tools.
Analyze the Barclays stock price chart
Analyzing a stock’s price charts enables you to forecast its future price direction by observing the long-term trend. You also get to identify support and resistance zones, which can help you determine your entry and exit levels. So, be sure to analyze Barclays' price chart before investing in the stock.
You can trade Barclays shares in various ways, but it is advisable to choose a trading style that you are most comfortable with. Depending on capital and risk appetite, you can day trade, swing trade, or buy and hold the stock. However, your analysis should inform your investment decision and not the other way round.
Barclays company overview
Barclays' origins can be traced to the origins of the goldsmith banking business established in the City of London in 1690. James Barclays later became a partner in 1736. In 1896, the colossus that we now know as Barclays began when several banks in London and the English provinces, including Goslings Bank, Backhouse's Bank, and Gurney's Bank, united as a joint-stock bank under its name. This made Barclays very popular nationwide. In 1967, the bank deployed the world's first cash dispenser.
Barclays operates nine segments: UK Retail & Business Banking, Europe Retail & Business Banking, Africa Retail & Business Banking, Barclaycard, Investment Bank, Corporate Banking, Wealth & Investment Management, Head Office Functions, and Other Operations.
Barclays is a constituent of the FTSE 100 Index and was listed on the London Stock Exchange in 1917 with ticker code BARC. The stock also had a secondary listing on the New York Stock Exchange. Currently, Barclays has a market capitalization of $41.3bn.
Barclays business model and revenue streams
Barclays has nine business segments: UK Retail & Business Banking, Europe Retail & Business Banking, Africa Retail & Business Banking, Barclaycard, Investment Bank, Corporate Banking, Wealth & Investment Management, Head Office Functions, and Other Operations. Barclays has a diversified business model, but its UK Retail business remains one of its major revenue drivers.
Investment banking accounts for 40% of the bank’s revenue, with over 60% of profits from fixed interest, currencies, and commodities (FICC) business. However, the bank is trimming its trading activities to focus more on retail banking.
Barclays has 15 million personal customers and 750,000 business customers. The corporate banking segment is also a strong driver of revenue. These segments increased the bank’s income by 22% to £12.5 billion in 2020 despite the pandemic's deteriorating economic outlook.
The Barclaycard segment is the eighth-largest payments business globally, bringing in twice as many customers as its retail segment. It is a high return-on-equity business, which Barclays aims to grow. The African retail and business banking segment covers 14m customers in 12 countries. Despite having just 5% of risk assets, Barclays earned 16% of its income from this segment in 2020.
History of Barclays
Barclays traces its origins back to 1690, when John Frame, a Quaker, and Thomas Gould, established their goldsmith banking business in London. The name "Barclays'' was adopted in 1736 when Frame's son-in-law, James Barclay, became a partner.
Barclays was able to extend its network between 1905 and 1916 by acquiring smaller English banks. Further expansion ensued in 1918 when Barclays amalgamated with the London, Provincial and, later on, with South Western Bank in 1919. Another amalgamation occurred in 1925, when the Colonial Bank, National Bank of South Africa, and the Anglo-Egyptian Bank were acquired by Barclays. In 1938, the bank acquired the first Indian exchange bank, the Central Exchange Bank of India.
Barclays was the first bank to appoint a female manager when it appointed Hilda Harding in 1958.
In 1965, Barclays expanded overseas, establishing a US affiliate, Barclays Bank of California, in San Francisco. It was later sold off in 1988 to Wells Fargo for US$125 million in cash.
In 1966, Barclays launched Barclaycard, the first credit card in the United Kingdom. It also introduced the first debit card about two decades later, and in 1968, the bank deployed the world's first cash machine in Enfield.
In 1980, Barclays expanded its business segments to include commercial credit after taking over American Credit Corporation. Following a series of protests against the bank’s involvement with the apartheid regime in South Africa, Barclays sold its business there. In 1996, Barclays bought Wells Fargo Nikko Investment Advisors (WFNIA) and merged it with BZW Investment Management to form Barclays Global Investors. Two years later, in 1998, the BZW business was broken up into various segments, part of which was sold to Credit Suisse. However, Barclays retained the business's debit side, which morphed into what is now known as Barclays Capital. In 1999, Barclays launched an internet service called Barclays.net but later sold it to British Telecom in 2001.
Barclays took over sponsorship of the Premier League in 2004, and the following year, the group moved its headquarters from Lombard Street in the City of London to One Churchill Place in Canary Wharf. That same year, Barclays closed off a £2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake in the business.
In 2007, Barclays was forced to borrow £1.6 billion (US$3.2 billion) from the Bank of England, a move that is often seen as the last option for any U.K. bank that cannot settle their debts to other banks at the end of a business day. However, Barclay’s management consistently denied that the bank was facing financial difficulties, stating that the loan was necessary due to a technical problem with their computerized settlement network. The denial failed to ease investors' fears as the company’s shares dropped by 9% and trading on the stock was temporarily suspended due to the rumors of the bank’s exposure to bad debts in the United States.
During the 2008 global financial crisis, two days after American bank Lehman Brothers filed for bankruptcy, Barclays announced that it was acquiring its prized investment banking and capital markets segment for just US$250m. Industry watchers and analysts widely regard the deal as a coup. Later in 2009, Barclays sold its Global Investors unit, which included its exchange-traded fund business, iShares, to BlackRock for US$13.5 billion.
In 2013, Barclays reported a net loss of £1.04 billion for the 2012 fiscal year. This was its first annual loss in two decades, so it heralded a series of cost-cutting measures, including the 2014 announcement of 19,000 job cuts over three years (beginning with 12,000 jobs cut in 2014). Also, the investment banking segment of the firm shrank by 20% between 2014 and 2016. That same year, Barclays sold its Retail Banking unit in Spain to CaixaBank, and in 2015, it sold its U.S. wealth and investment management business to Stifel for an undisclosed amount.
Furthermore, in 2016, Barclays sold its Africa business amid dwindling profits, and in May 2017, it sold £1.5 billion worth of shares of its Barclays Africa Group subsidiary as part of its strategy to refocus on its business in the UK. Later that year, Barclays sold off the last part of its European retail banking segment.
In 2020, Barclays was fined £26 million because of how it treated its customers who fell into debt or experienced financial problems.
Brokers that offer Barclays shares
Many brokers offer Barclays' shares for sale both on the New York Stock Exchange and its London counterpart. In the table below, we have compiled a list of the best brokers offering Barclays stock in both exchanges.
Should I invest in Barclays stock?
The reopening of the economy bolstered by the vaccine rollout would see financial institutions such as Barclays present excellent long-term investment opportunities for investors because most stocks in this sector are trading below their fair value. As such, you can consider adding Barclays to your stock portfolio.
Barclays stock investment potential
Last year, 2020, has been a challenging one for the banking sector, and more specifically, Barclays. The bank failed to outperform the broader index, with its share price declining by 16% against the FTSE 100’s 11% decline.
Though the bank stands to benefit from the reopening economy, the rise in interest rate may truncate the industry’s recovery. Rising interest rates imply that customers would borrow less, leading to reduced spending and less income accrued from loans. However, given the bank’s recent share buyback ambitions, increased capitalization, and cost-cutting measures exemplified by its divestitures, investors should keep a keen eye on Barclays stock.
What kinds of investors should include Barclays stock in their portfolios?
Ever since it announced a loss in 2013, Barclays has embarked on a series of cost-cutting measures. While proceeds from the divestiture of its assets in Europe, Asia, and Africa have made the organization flush with cash and reduce its debts, it is yet to impact the share price. This has been exacerbated by the pandemic’s battering of the stock. Hence, this stock may not appeal to short-term investors or day traders.
How much should I invest in Barclays?
How much you can invest in Barclays shares depends on a combination of factors that ultimately influences how much capital you allocate to a particular stock. Age, investing experience, results of your analyses (fundamental and technical), and your investment timeframe all influence how you should allocate your investment capital. However, the general rule of thumb is not to invest an amount that you cannot afford to lose.
How to buy shares in Barclays stock?
Step 1: Choose the exchange you want to buy from and the trading platform to use.
The first step to trading any Barclays stock is to choose whether to buy from the NYSE or the LSE and then choose the brokerage platform to use. When it comes to the broker to use, the general parameters to consider when choosing a trading platform are commission and fees, security, ease of use, technical tools, and the quality of customer support.
Step 2: Open your brokerage account.
After choosing the right broker for you, go ahead and open a brokerage account. You'll need your ID, proof of address, bank details, and national insurance number for this purpose.
Step 3: Start buying Barclays shares.
After you have opened and funded your brokerage account, you can start taking positions in Barclays shares.
Buy Barclays shares using a broker
You can buy or sell stock on your own by opening a brokerage account with one of the many brokerage firms. After opening your account, connect it with your bank checking account to make deposits. The fund is then available for you to invest.
Buy Barclays shares with a direct stock purchase plan (DSPP)
Direct Stock Purchase Plans (DSPP) are a way for individuals to buy stocks directly from a company rather than through a brokerage. Unfortunately, Barclays shares are not offered through DSPP.
Frequently Asked Questions
The stock is set to recover with the entire market in this post-pandemic era.
Barclays reported a full-year profit of £1.53 billion for fiscal 2020.
Yes, you can make money trading Barclays stock.
Whatever platform you choose is best for you.
Shares of Barclays are traded between 08:00 am and 4:00 pm London Time on the LSE and between 9:30 am and 4:00 pm New York Time on the NYSE.
The stock trades on both the LSE and the NYSE.