Thanks. Valid observations. Agree it’s a significant factor & one of a few major headwinds affecting this sector. That said, I’d only be seriously concerned about BARC’s recovery if the challenges were more so stock-specific. When they’re sector-wide, it gives me more confidence that things are more likely to improve as macro-factors gradually change.
We also know that this sector more so than any other frequently falls in & out of favour due to a range of unpredictable, volatile global events that can play out at any one time. Hence the extreme volatility in SPs going back years, even for those banks with strong underlying fundamentals.
I’d add that despite the recent dip seen across US banks, their major banks haven’t done too badly at all since 2008’s crisis. By contrast, some large UK banks, not least BARC, have had a really torrid time over the past few years. Just one reason why I think they’re oversold.
But once all legacy issues & heavy burdens like PPI are over, these UK banks remain highly profitable businesses which surely present excellent value at recent & current SP levels.
SP touching highs of 174+ earlier today, though fallen back a bit since. IMO, that still seems cheap. But at least it’s more tangible progress after recently testing closing support at 162+. If our government succeeds in negotiating a Brexit deal that’s favourable to UK banking, this could easily jump 15p to 20p in a couple of days as used to happen frequently before Brexit.
Developments over the next few weeks will be key to the timeline of recovery here, as for other UK banks. I remain optimistic that strong mutual interest will see a reasonable deal & a good bounce here.