Why I believe the Barclays share price means the bank’s a bargain buy

first_img It has been a tough start to the year for Barclays (LSE:BARC) CEO James “Jes” Staley. Forced to publicly discuss unfortunate links with convicted sex offender Jeffrey Epstein, the Barclays share price has also crashed. However, I think the share price will rebound in the long term if the company is successful in the following areas.Weathering Covid-19Whilst the Barclays share price is now at levels not seen since 2009, the bank is much better capitalised than it was in 2009. In order to assess this, I look at its Common Equity Tier 1 Ratio (CET1). This roughly translates to the amount of capital it has to absorb potential losses from its risk-weighted assets. It now stands at 13.8%, compared with just 5.6% in 2008. This will help Barclays cover £1bn worth of bad loans expected from the crisis. Combined with the UK government’s furlough scheme and pulling its latest dividend, I believe this should enable the bank to survive.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…It is also worth noting that unlike the 2008 crisis, this is not a banking crisis. With Staley and other senior management waiving pay increases, I don’t think banks will re-emerge as public enemy number one. Therefore, a potential legacy of fines and drop in demand for its products should be avoided.Consumer bankingThe consumer bank primarily drives group income, accounting for 47% in 2019 (£10.2bn). A much-publicised threat in this industry comes from challenger banks, such as Monzo and Metro Bank. However, increasingly, Barclays and the other big consumer banks appear to be winning this fight. Indeed, the top six banks now hold 87% of personal accounts, up from 80% in 2000.I think there’s two key reasons why.Regulation: consumer banking is a highly regulated industry that favours the big players who can afford to comply with these regulations.Digitalisation: technologically the big players are catching up with the challenger banks. Barclays has made becoming more digital one of its four strategic pillars, with the number of digitally active customers up by 6%.This should ensure Barclays at least retains its market share.Investment banking35% of the group’s income, investment banking is also crucial to long-term success. Again, in an industry where brand name and relationships are key, I do not see Barclays’ market share deteriorating. In fact, since 2017 Barclays has achieved nine times the market share gain of the next best European bank. This has elevated it to the sixth largest by fee income globally.As alluded to above, Barclays’ group 2019 results were very strong, beating analysts’ estimates. Earnings were up 9% versus 2018 thanks to higher revenues and lower operating costs. Therefore, I believe that whilst the Barclays share price has dropped due to Covid-19 and speculation surrounding the CEO, the business is still fundamentally sound and, at a price-to-earnings ratio of just 6.4, a bargain buy. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Why I believe the Barclays share price means the bank’s a bargain buy Charlie Watson has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. “This Stock Could Be Like Buying Amazon in 1997” See all posts by Charlie Watson Enter Your Email Addresscenter_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Charlie Watson | Monday, 27th April, 2020 | More on: BARC Simply click below to discover how you can take advantage of this. Image source: Getty Images. 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