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On Friday, 27 February, the FTSE 100 hit a report excessive of 10,934.94. That day, my spouse and I mentioned promoting varied shares to take massive income. Alas, UK shares have since fallen again, with our Barclays (LSE: BARC) shares taking a hefty hit. Are they now too low cost to disregard?
Barclays will get battered
This newest stock-market volatility adopted the US assault on Iran since Saturday, 28 February. From end-February, the FTSE 100 has slid 5.2%, whereas the US S&P 500 index is down 2.8%. In the meantime, the tech-heavy Nasdaq Composite index has misplaced simply 1.4% in March.
Some Footsie shares have seen important slides from their 2026 highs. For instance, Barclays inventory peaked at 506.4p on 4 February, having been as little as 223.75p as lately as 7 April 2025.
As I write, shares within the Blue Eagle financial institution stand at 390.65p, down 22.9% from this 12 months’s peak. This values the financial institution at £53.8bn, making it the 14th-largest enterprise within the FTSE 100.
Regardless of this setback, the shares have had a powerful displaying. They’re up 32.9% over one 12 months and 114.5% over 5. Even higher, these features exclude money dividends, which have been beneficiant from UK banking shares.
Worth candidate?
Thus, the shares’ money payout is roofed greater than 4.9 occasions by historic earnings. To me, this big margin of security means that this money stream is stable, with scope for future will increase.
Then once more, with battle raging within the Center East as soon as once more, is that this actually an excellent time to purchase shares? I’ll quote legendary banker Baron Rothschild, who as soon as suggested, “Buy when there’s blood in the streets, even if the blood is your own.”
Purchase, maintain, or promote?
For the report, my household portfolio owns Barclays shares, which we purchased in mid-2022 for 154.2p a share. Thus far, we’re sitting on a paper acquire of 153.3% — one in all our greatest low-risk trades of the final 5 years. Nonetheless, we reinvest all of our Barclays dividends into shopping for extra shares. This has turbo-charged our income, pushing them nearer to the 200% mark.
I’ve no intention of promoting our Barclays stake at wherever close to present ranges. Certainly, larger oil costs brought on by this newest battle will doubtless push up UK inflation (the rising price of dwelling).
If this battle continues and vitality costs keep elevated, it will hinder the Financial institution of England’s capability to chop its base charge. And better rates of interest means larger internet curiosity margins for Barclays and different British banks. In different phrases, so long as debtors maintain paying their mortgages, loans, and bank cards, financial institution earnings may keep excessive and steady.
Then once more, although I see Barclays shares as under-priced, the financial institution’s revenues, earnings, and money stream may undergo had been the UK to slip into recession. Financial progress is already sickly and would possibly flip damaging as gas and vitality prices soar. Therefore, I’ll maintain fireplace on shopping for extra of this sliding inventory till the fog of battle clears!
