(Update) Barclays (BARC) shares see-sawed as investors responded to the good and bad in its annual results.
News of a near tripling in profits last year from £1.1 billion to £3.2 billion as the bank set aside far less for wrongdoing looked good but in fact missed analysts' consensus forecast of £3.97 billion.
More impressive was an improvement in the bank's balance sheet with its core capital ratio rising from 11.4% to 12.4%. Relieved investors took this to mean the bank, which narrowly failed a Bank of England 'stress test' last November, would not have to raise more money, sending the shares 3.4% higher to 243p in early trading.
‘We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond,’ said chief executive Jes Staley.
However, the shares, which have rallied strongly since last summer, turned south to trade 3% lower at 228.5p in the afternoon as investors squared up to the challenges that remain, such as a legal fight in the US where it faces a civil claim over alleged mortgage bond mis-selling before the financial crisis.
Senior Hargreaves Lansdown analyst Laith Khalaf said: ‘Lower PPI costs and currency tailwinds have helped boost profits at Barclays, while good progress has been made in winding down the bad bank that has been holding the group back.
'The performance of Barclays’ core UK and international divisions was somewhat underwhelming though, with underlying profits actually falling back slightly.'
The FTSE 100 slipped 23 points or 0.3% to 7,278 as global bank HSBC (HSBA) shed 3.9% and Centrica (CNA), down 3.9% at 224.8p, dragged utilities lower as investors reacted with disappointment that a return to profit growth was not matched by a rise in its dividend.
The British Gas owner proposed a final dividend of 8.4p, holding the full-year pay-out to 12p. Dividends had been falling since 2013's full-year 17p payment, but the company said a rise wouldn't be on the cards until net debt falls to between £2.5 billion and £3 billion. It currently stands at £3.5 billion, and could reach that threshold by the end of the year.
'Centrica's results provided the unexpected announcement that there would be no dividend growth in 2016,' said Oliver Salvesen, analyst at Jefferies.
'Given the risks related to energy supply and downside to dividend expectations we reiterate our "underperform" recommendation".
Cheerier dividend news came from Intu Properties (INTUP), which shot 6.6% higher at 293.7p after the shopping centre landlord hiked its shareholder pay-out for the first time in five years.
The board recommended a final dividend of 9.4p per share, bringing the 2016 total to 14p, up 2% on 2015's payout.
RSA Insurance (RSA) was also a riser, up 5% at 606p after posting a 25% rise in 2016 profits.
EasyJet (EZJ) was the biggest faller, down 5.5% as the budget airline traded without the attraction of its latest 53.8p dividend.
On the FTSE 250, Morgan Advanced Materials (MGAMM) was the biggest riser, up 8.2% at 323.8p after an 8.5% rise in 2016 revenues for the carbon and ceramic products maker despite 'challenging' trading conditions.
Among 'small cap' stocks, Morgan Sindall (MGNS) jumped 7.2% to 967p after reporting a 32% jump in 2016 profits.
Hansard Global (HSD) fell to the bottom of the index, down 9.9% at 101p after the investment group reported a drop in profits and said it planned to halve its dividend next year.