Barclays shares slump to their worst day since the Brexit vote after disappointing results

• Will Martin
 

• 1h
• 455

MRKET REUTERS/John Gress JG/JDP

• Calm waters in the markets hurt trading revenues at Barclays in Q3.
• The third quarter was clearly a difficult one for our Markets business," CEO Jes Staley said.
• Shares plunge nearly 8% to see their biggest single day loss since June 24, 2016.

LONDON — Shares in banking giant Barclays had their worst trading session since the day after Britain voted to leave the EU last summer after a disappointing set of Q3 results for the lender dropped on Thursday morning.

On the surface, things looked reasonably good as profits jumped by 19% before tax compared to the same period in 2016, which the bank put down to "lower litigation and conduct and Non-Core costs." Profits were £3.448 billion in the quarter.

However, elsewhere, things were not so peachy, with Mike van Dulken, head of research at Accendo Markets noting that: "Total income and net operating income were not quite as high as consensus had hoped, with bond, FX and commodity trading down 34% amid muted volatility."

Essentially, global markets are too quiet for Barclays' markets business, which the bank said on Thursday was hit "hard" during the third quarter of 2017.

Beyond the headline number, however, and Barclays' markets business didn't have much fun in the quarter, with the lack of volatility to blame. 

In the words of the bank:

"Markets income decreased 14% to £3,535m reflecting a 27% reduction in Macro income to £1,314m, due to lower market volatility and the impact of exiting energy-related commodities, as well as an 8% reduction in Equities income to £1,267m driven by lower equity derivatives revenue, partially offset by improved performance in cash equities and equity financing.

"The third quarter was clearly a difficult one for our Markets business within BI. A lack of volume and volatility in FICC hit Markets revenues hard across the industry, and we were no exception to this trend," Chief Executive Jes Staley said in a statement alongside the results announcement, reinforcing the numbers.

All that led to a scenario where investors decided to sell out of the bank's stock aggressively on the day, as the chart below shows:

Markets Insider

Despite the lackluster results, CEO Staley was broadly positive about the state of the bank in his statement, saying:  "The third quarter of 2017 was particularly significant for Barclays as it was the first for many years in which we have not been in some state of restructuring.

"Having closed the Non-Core unit, and sold our controlling interest in Barclays Africa in June, we now have the end state Transatlantic Consumer and Wholesale Bank - in Barclays UK and Barclays International - which we set out to build in March of 2016."

By no means is Barclays alone as a big bank struggling to make money in its markets business in the current climate, with Deutsche Bank flagging similar problems in its results, which were also released on Thursday morning.

 "The revenue environment remained challenging," Deutsche Bank CEO John Cryan said in a statement.

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New York City has topped San Francisco when it comes to startups raising VC cash — but it may not last

• Becky Peterson
 

• 16h
• 2,799

Abbie Parr / Stringer

• The New York City metropolitan area was the most highly-funded region of the US in the third quarter of 2017 — pushing San Francisco out of its long-held spot.
• Startups in NYC saw $4.227 billion in funding during the third quarter of 2017, up from $2.689 billion in the second quarter. 
• Funding in San Francisco/North Bay Area was flat from last quarter, with $4.177 billion invested in local startups.

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New York City has surpassed San Francisco as the region whose startups attract the most venture capital money, thanks in large part to a mega-round of funding scooped up by co-working company WeWork.

San Francisco/North Bay funding for the past eight quartersPwC and CB Insights MoneyTree Report Q3 2017

VCs invested $4.227 billion in NYC companies over the third quarter of 2017, compared to $4.177 billion in funding for companies in San Francisco and the North Bay Area. These numbers come from the recently released Q3 2017 MoneyTree Report from PwC and CB Insights. 

While San Francisco's funding was flat from the previous before, NYC's numbers were up considerably from $2.689 billion in funding during Q2. The spike was due to the enormous $2.5 billion in funding garnered by the NYC-base coworking space company WeWork. 

New York City metropolitan area funding for the past eight quartersPwC and CB Insights MoneyTree Report Q3 2017

Barring another massive Big Apple round of startup investments, San Francisco will probably regain the top spot by the end of the year.

San Francisco, home to Uber, Twitter and numerous other big tech names, has long dominated the startup funding rankings. But it's worth nothing that Silicon Valley — the venture capital and tech hub just south of San Francisco — is calculated as a separate region in the MoneyTree report.

Silicon Valley companies saw $2.2 billion in funding for the third quarter — a big dip from $4.1 billion in the quarter prior. 

Here's how these regions compare to the rest of the US:

PwC and CB Insights MoneyTree Report Q3 2017

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