Barclays pulled lower as UK bank valuations dented by BoE rate cut

Barclays (LSE:BARC) shares closed Thursday 3.6% lower, irrespective of its quarterly financials, as the UK banks all lost value after the Bank of England cut base interest rates – by a quarter point, to 5%.

The prospect of tighter interest margins dented investor sentiments.

Whilst Barclays dropped, the fall was quiet modest compared to high street banking peers Lloyds and Natwest which gave up more than 17% and 6% respectively on Thursday afternoon.

Putting the spotlight on Barclay’s financials, released this morning, shows an improved performance driven mainly by its investment banking operations, and a reduction in writedowns compared to last year.

Barclays reported a 1% rise in second-quarter income to £6.3 billion, whilst net profit attributed to shareholders came in at £1.2 billion which, whilst less than last year’s total, was ahead of consensus market expectations of £1.03 billion.

Barclays announced a new £750 million buyback and a 2.9p dividend, with the bank confirming it is targeting £10 billion in shareholder returns by 2026, mainly through buybacks.

In London, Barclays shares ended Thursday’s dealing down 3.63% at 225.32p.