A Member of Pat McKeough’s Inner Circle recently asked for his advice on a U.K.-based bank and financial services giant that provides retail banking, credit cards, corporate and investment banking and wealth management services.

Pat notes that the attention of activist investors, plus the improving results for the bank’s equities trading operations, bolsters its outlook. Still, the bank continues to face Brexit uncertainty and the impact from continuing U.S.-Chinese trade tensions. All of that adds uncertainty, says Pat.

Q: Pat: May I get your views on Barclays bank? Thank you.

Barclays plc (symbol BCS on New York; www.barclays.com), is a U.K.-based bank and financial services company that provides retail banking, credit cards, corporate and investment banking and wealth management services. It operates through two main businesses: Barclays UK and Barclays International.

The Barclays UK division comprises the U.K. retail banking operations, the U.K. consumer credit card business, U.K. wealth management and corporate banking for smaller businesses. The Barclays International operations include the corporate banking franchise, the investment bank, the U.S. and international cards business, and international wealth management.

Barclays was founded on July 20, 1896 and is headquartered in London. The stock has its main listing on the London exchange under the symbol BARC.

The bank is now the subject of activist pressure: New York-based activist Sherborne Investors bought a 5.5% stake in Barclays last year and wants to get its chief executive, Edward Bramson, a seat on Barclays’ board. Shareholders vote on the board members at the bank’s annual meeting on May 2, 2019. Sherborne wants Barclays to sharply cut back its financial markets businesses to lower the bank’s risk, free up capital and improve its share price. It believes the bank should then focus on its retail consumer business.

Inner Circle: Share buybacks and rising dividends in store

However, Barclays trading operations have experienced a big turnaround lately, particularly in equities trading. This unit has outperformed its European and U.S. rivals with revenue up 27%. Overall, the bank reported a much lower loss in the 2018 fourth quarter—76 million pounds ($99 million U.S.), compared to 1.29 billion pounds a year earlier.

At the same time, Barclay’s is taking measures to boost shareholder value to counter the pressure from Sherborne. The bank will buy back shares as well as raise its dividend. The stock currently yields a high 4.0%.

The outlook for the U.K economy is uncertain, due in part to Brexit, while the world economy faces the challenges posed by rising U.S. interest rates and the prospect of a continued U.S./China trade war.

Barclays plc is okay to hold if you want to own an international financial stock. However, we have more confidence in North American-based financial institutions, particularly those we recommend in The Successful Investor and Wall Street Stock Forecaster.

Recommendation in Pat’s Inner Circle: Barclays plc is okay to hold.