This is a fascinating interview. By the sound of Jes Staley, CEO of Barclays, this is a company in panic mode. He’s selling all non-core assets, assets that were supposed to be the driving force of growth. Instead, it’s a fire sale and desperation is in the air.
Staley insists the company will not need to raise new capital. How many times have we heard this? Moreover, he says the company is moving very rapidly to execute assets sales, for the explicit purposes of increasing its share price, in order to ensure access to capital markets.
Sounds grim.
BCS is off by 40% in 2016.
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Sounds like they’re raising capital through asset sales and want access to capital markets “just for the fun of it.” This is one confused CEO.
BCS sovereign portfolio has 45% exposure to countries outside the UK and US.
LYB is the play if you think the UK will be fine, with 88% exposure to the UK and 9% to the US.
Two different banks in that regard.
Sorry, LYG. Fat fingers.
Perfect time to buy either BCS or LYG. Both have been repairing balance sheets since 2008.
Stupid question probably but does this have any effect on $TLT?
DOWN WITH THE BANKER CLASS DOWN WITH THE ENTITLED RICH
Multinational banks have tremendously leveraged balacne sheet. LYG has $1.189 Trillino in assets and $1.120 Trillion in liabilities. They had earnings of $1.27B last year, but this is only rounding error when compared to the size of their balance sheet. My point being is that with such high leverage, if the market even *thinks* you are in trouble, then you are in trouble. If their assets go down in vale by 5% (likely in a firesale), then they are bascially bamnkrupt. Small changes in sentiment on your company make the all difference; that’s how leverage works and why not one of the 5 major US Investment Banks survived 2008 as IBs (Lehman, bear: bankrupt; Merrel: bought out; GS, MS: converted to BHCs).
So regardless of how you think Brexit would (or should) affect Lloyd’s or Barclay’s future cash flows, they are still extremely risky stocks right now.