Shares digital

Despite announcing a 10% hike in its dividend alongside numbers for the year, Barclays (BARC) was down around 1% as yet another unpleasant surprise emerged from the credit crisis.

Credit Suisse, which until now had been relatively unscathed by the turmoil, announced a £1.5 billion writeoff.

The news had particular impact because there had been no hint of it in full-year results released last week. However, the bad news from Switzerland shouldn’t obscure the fact that Barclay’s earnings, while down very slightly on last year, were in line with market expectations and credit market related writedowns had only grown from £1.3 billion to £1.6 billion since the trading update in November. Alex Potter, analyst from Collins Stewart, says: ‘The prospect of further writedowns cannot be discounted, but a dividend increase and the ‘confident’ outlook give us comfort. We feel this bodes well for the results season.’

Elsewhere, the government’s decision to nationalise Northern Rock (NRK) has led to concern among the banks over the way the lender will be run now it is in public hands – especially given that the man handed the job of running it, Ron Sandler, says it will ‘compete vigorously’.

Shares says: The banks aren’t out of the woods yet but results season could lay the foundations for a recovery.

by: Tom Sieber