(Bloomberg) -- Barclays Plc said the final three months of the year were challenging for its traders and investment bankers, joining rivals across Wall Street in lamenting a continued slump in revenue from dealmaking and markets.  

In the fourth quarter, the British firm’s trading division was facing a tough comparison to a year earlier, when revenue hit a record, Marina Shchukina, head of investor relations, said at an event hosted by Berenberg Capital Markets. Bankers, meanwhile, have been stung by the continued drought of dealmaking and capital markets activity, with many corporates on the sidelines as central bank hiked interest rates around the globe. 

“It’s been similar to what we experienced in Q2 and Q3 — not quite enough volatility for markets, but a little too much for banking,” Shchukina said. “We hope the recovery will be forthcoming in 2024.” 

The comments come after Jefferies Financial Group Inc.’s fourth-quarter profit and revenue dropped as the firm’s investment bankers continued to grapple with a deal slump. Citigroup Inc. has warned fixed-income and equities trading revenue in the fourth quarter could drop as much as 20% compared to the third quarter.

Barclays’s fixed-income trading revenue is expected to have slipped 3% to £947.1 million ($1.2 billion) in the final three months of the year compared to the same period a year earlier, according to analyst estimates compiled by Bloomberg. Investment banking revenue is expected to slide 9.5% to £434 million. 

What Bloomberg Intelligence Says: 

From a quarterly peak of almost $18 billion in 2021, the combined investment-banking revenue for the largest global lenders has more than halved, falling to an aggregate $7-$8 billion a quarter recently.

- Philip Richards, senior banks analyst

Barclays is planning to unveil a series of new targets for returns, expenses and shareholder distributions when it announces fourth-quarter results next month, Shchukina said. The company has already warned that it plans to incur charges for the fourth quarter tied to a number of “structural cost actions” it’s taking to improve profitability, with a reduction of about 5,000 jobs during last year. 

“To make it absolutely clear, we’re not embarking on a multi-year restructuring here, that is not our intention,” she said. “We are talking about specific actions that relate to three things: 1) people 2) property and 3) infrastructure.”

The company, which trades at a paltry price-to-book ratio of 0.41, continues to see buybacks as an attractive way to return capital to shareholders, she said. 

Shchukina acknowledged that there’s been debate among investors over whether Barclays should shrink its investment banking arm, which consumes vast amounts of capital. The firm is one of the leading providers in the debt capital markets business and has grown its presence in financing and prime in recent years. 

“We feel that that business is now of appropriate size and scale to compete effectively with our US banking peers and generate good returns,” Shchukina said, noting the company would give “further color” about the business next month. 

Read more: Barclays Bankers on Edge After Bosses Start Revamp Countdown 

(Updates with earnings expectations in fifth paragraph.)

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