Berenberg says concerns around Barclays's investment bank revenues and credit card losses excessive

Client feedback in 2023 suggested a growing openness towards the lender, which they said partly reflected its ability to generate a RoTE of 13% in fiscal year 2021 and an estimated 10% in FY 2022.

And while some investors continued to fret about cyclical risks to the investment bank arm's revenues and credit card losses, Berenberg judged them to be "less material than many perceive".

Partly due to the above, they anticipated that Barclays would notch up a RoTE in excess of 11% beyond FY 2022.

They also noted how Barclays had grown its market share in fixed income, currencies and commodities, as well as equities, by about 30% and 50%, respectively, in comparison to 2017-19.

That was largely thanks to growth in the US, where investment bank returns were twice as high as in Europe.

Indeed, they conceded that their forecasts for Barclays's IB revenues might be too conservative, despite which they supported the analysts' forecasts for RoTE.

Furthermore, as a proportion of total loans, credit card loans had dropped by a tent in comparison to FY 2019.

They also nudged up their target price from 260.0p to 270.0p.

"Barclays trades on 5.0x our FY 2024E EPS (a c25% discount to the European banking sector). Considering our FY 2023E RoTE of 11.5%, we believe that Barclays is simply too cheap, trading on 0.6x TBV."