Barclays (LON: BARC) share price got supercharged this week, continuing a bull run that started in December. It soared to a high of 180p, its highest level since February 22nd, making it one of the best-performing UK bank stocks. Notably, the stock is in its sixth consecutive week of gains.

Barclays, one of the biggest banks in the UK, is facing numerous headwinds and tailwinds. On the positive side, its lending business is doing well as interest rates remain supportive. 

The most recent results showed that its net interest income (NII) jumped by 20% in 2023, hitting a high of £12.7 billion. Its UK business had a NII of £6.4 billion, which are impressive numbers.

The company will likely continue generating these returns in the first half of the year as interest rates are expected to remain high.

Barclays has worked to boost its market share in the UK. It recently announced that it would acquire Tesco Bank in a $757 million deal. Tesco brings in a huge network and millions of more customers. It also acquired Kensington Mortgages in 2023.

The biggest challenge that Barclays is facing is in its investment bank. The situation is so dire that the company is expected to slash hundreds of its investment bank positions in a bid to preserve cash.

Investment banks are going through a period of prolonged drought as interest rates remain prohibitive and as regulators tighten their screws. In the US, the FTC has sued to block numerous deals, including JetBlue’s buyout of Spirit Airlines.

The recent results showed that Barclay’s corporate and investment bank income retreated by 4% to £12.6 billion in 2023. It was the only laggard as the Barclays UK income rose by 5% and its consumer cards and payments soared by 18%.

Barclays is not the only investment bank that is struggling. In a report on Wednesday, the Financial Times noted that most European investment banks like Deutsche Bank and BNP Paribas slashed bonuses as the industry’s woes continued. Investment banking fees dropped to $17.2 billion in 2023 from $30 billion in 2021.

Barclays has long been forced to think about the future of its investment bank division. Some analysts believe that the company would do well if it separated into two. Its management has always rejected the move arguing that Barclays was well-positioned to take advantage of transatlantic deals.

Data compiled by WSJ shows that Barclays has handled M&A deals worth $67.9 billion this year, making it the eighth biggest company in the industry. It has also been anequity capital markets bookrunner in deals worth $5.23 billion. In all, its investment banking revenue stands at $645 million.

BARC chart by TradingView

Turning to the weekly chart, we see that the BARC stock price has been in a parabolic move in the past six months. It has risen in the past seven straight weeks. Most importantly, it has flipped the important resistance point at 178.50p, its highest swing on February 6th.

The stock has also jumped above the 23.6% Fibonacci Retracement level and the 50-week and 25-week moving averages. Further, the Average Directional Index (ADX) has continued rising and has moved to 20.

Therefore, the outlook for the stock is bullish, with the next point to watch being at 195.62p, its highest point in January 2022. This price is about 8.32% above the current level.

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