Barclays (BARC) and Secure Trust (STB): 2 banking stocks to buy now

 

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Highlights 

  • Barclays posted strong year to date Q3 2021 results, driven by higher fees from its corporate and investment banking businesses.
  • Secure Trust Bank’s shares jumped over 2 per cent after it posted a strong Q3 trading update. Its new business lending rose above its pre-pandemic levels.

Banking stocks in the UK are in focus today after reports emerged that the UK’s Chancellor of Exchequer, Rishi Sunak, is planning a tax cut for some of the UK’s largest banks.

As per a Financial Times report, Sunak is reportedly mulling the cut so that the City of London remains competitive following the UK’s exit from the EU.

According to the report, Sunak plans to cut the additional corporation tax by over 60 per cent. The cut would thus bring down the levy from its current rate of 8 per cent down to 3 per cent starting from April 2023.

The chancellor is expected to make this announcement in the UK Budget next week, on 27 October.

Given this backdrop, let us take a look at 2 FTSE listed stocks in the banking sector that have also announced their earnings today:

  1. Barclays PLC (LON: BARC)

FTSE 100 index company Barclays is a British multinational banking major. The company reported record Q3 2021 and YTD Q3 2021 results today.

The bank’s year to date Q3 2021 net operating income rose by 39 per cent to £17,402 million, compared to £12,479 million in YTD Q3 2020.

Also, its YTD Q3 2021 profit before tax rose to £6,940 million, from £2,419 million in YTD Q3 2020.

The strong performance was driven by increased activity in its corporate and investment banking (CIB) business segment, continued consumer recovery and being well positioned despite concerns of a rate hike. 

Barclays’ CIB YTD Q3 2021 return on tangible equity (ROTE) stood at 16.4 per cent, up from 10.5 per cent in YTD Q3 2020.

(Image source: Refinitiv)

Barclays’ shares were trading at GBX 196.88, down by 0.79 per cent on 21 October 21 at 09:02 AM BST, while the FTSE 100 index was at 7,198.17, down by 0.35 per cent.

The company’s market cap stands at £33,408.72 million and one year 88.55 per cent as of 21 October 21.

  1. Secure Trust Bank PLC (LON: STB)

Main market listed firm Secure Trust Bank is a UK based retail and commercial bank.

The bank posted its Q3 2021 trading update today, where its new business lending rose by 593 per cent to £368.4 million, from £231.3 million in Q3 2020, while it rose by 20.2 per cent from £306.5 million from Q2 2021.

The bank’s strong Q3 trading result was driven by its new business lending rising above its pre-pandemic levels now.

Its net core lending in Q3 2021 was up by 7 per cent to £2,404.4 million, from £2,247.8 million in Q3 2020. And up by 3.3 per cent from £2,327.6 million in Q2 2021.

(Image source: Refinitiv)

Secure Trust’s shares were trading at GBX 1,180.00, up by 2.61 per cent on 21 October 21 at 08:22 AM BST, while the banking sectoral index was at 3,036.35, down by 0.86 per cent.

The company’s market cap stands at £214.34 million and one year 84.94 per cent as of 21 October 21.


 

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