What a year it’s been so far for global stock markets. The first two months of 2026 were pretty smooth sailing, with share prices rising to new heights worldwide. But the then US attacked Iran on 27 February and stocks plunged. At its low, the US S&P 500 index lost 9.4% of its value in a month. However, here in the UK, Barclays (LSE: BARC) shares fared much worse.
Barclays gets battered
At their 2026 high, Barclays shares peaked at 506.4p on 4 February. That was the first time they’d breached the £5 mark since end-2007, before the global financial crisis of 2007-09 crashed banking (and other) stocks.
After a steep, swift, and sudden slide, the Barclays share price hit its 2026 intraday low of 361.35p on 23 March. At that point, the shares had lost 28.6% of their value in under two months.
By the way, my family portfolio owns Barclays stock, having paid 154.2p a share for our stake in mid-2022. And as a shareholder, I was struggling to see how the Blue Eagle bank’s stock had slumped so far in so little time. On 18 March, I wrote arguing that the bank’s shares — then 390.65p — were back in the stock market’s bargain bin.
Booming Barclays
Thus far, it seems my call was right. As I write (24 April), Barclays shares trade at 420.8p, valuing the bank at £58.1bn. This ranks the group at #13 among the elite FTSE 100 index.
Currently, the shares trade on nearly 10 times historic earnings, producing an earnings yield of 10.1%. This means that their dividend yield of 2% a year is covered a very healthy five times by trailing earnings.
As things stand, this Footsie firm’s shares no longer look cheap to me. I originally bought them for their market-beating cash yield, which has since fallen steeply as the share price climbed. Would I buy Barclays stock today? No, but I also have no intention of selling our existing holding.
That said, I expect Barclays to generate powerful profits in 2026. Thanks to this latest sharp spike in energy prices, UK inflation is rising. This leaves the Bank of England with little to no scope to lower its base rate anytime soon. This means that banks’ NIMs (net interest margins — the spreads between borrowing and savings rates) will remain high.
Furthermore, with leading positions in home loans, business lending, and credit cards, Barclays will benefit big-time from UK interest rates staying higher for longer.
What could derail this money train? Risks include a weaker property market, falling demand for credit, and rising loan losses/bad debts. These could hit revenues, earnings, and cash flows at Barclays and other British banks. Even so, I’m holding on tight and hoping for even juicier returns from our Barclays shares.
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