When I was looking at the Barclays (LSE:BARC) results last week, I was reminded of the words of Warren Buffett, who once said: “Never invest in a business you cannot understand.”

As a shareholder in the bank, I was taking an interest in its 2024 results, which were released on 12 February. In particular, I was reviewing the company’s extensive 536-page annual report.

What’s inside?

It’s an impressive document. It contains 226,195 words – yes, I checked! Based on an average reading speed of 238 words per minute, it’d take me nearly 16 hours to read it all. But this leaves no time for breaks. And it’d take me far longer to understand it all.

I’m an accountant so it’s the numbers that interest me most. However, the financial statements don’t start until page 423. Before that, it’s necessary to wade through all sorts of other information, including a business review, climate and sustainability report, and a section on corporate governance.

Risk is clearly a big issue for the bank. The word – and its derivatives – appears 3,846 times. Indeed, the risk review runs to an astonishing 134 pages. Reading the potential challenges, I’m surprised the bank’s directors want to get out of bed in the morning.

And then there’s the bit on the climate. Don’t get me wrong, we all need to play our part in saving the planet. But over the course of 78 pages, Barclays goes into a huge amount of detail. Do I really need to know that £42bn has been lent to properties with an Energy Performance Certificate rating of D?

Stepping back

Warren Buffett claims that investors don’t have to be particularly bright to make money. He reckons an IQ of 130 will do. Unfortunately, mine isn’t high enough to cope with this information overload.

But there’s a danger of over-complicating things.

I’ll admit I don’t understand “franchise-viability risk” or Basel 3.1 standards. 

But I do know Barclays makes its money by incentivising customers to deposit their savings, and then lends this cash to others at a much higher interest rate. Simple. I don’t need to read all 536 pages of the bank’s annual report to understand this.

And impressively, despite interest rates starting to fall, it managed to increase its net interest margin, in 2024, to 3.29% (2023: 3.13%).

I know the earnings of banks can be volatile. And there are no guarantees that Barclays will meet its targets.

But I own the bank’s shares because, when I first invested, I thought they offered good value. Also, its growth prospects looked promising. Today, my view hasn’t changed. Based on its 2024 earnings per share of 36p, the stock trades on a historical price-to-earnings ratio of 8.3. This is below the FTSE 100 average.

Encouragingly, its 2024 results beat expectations and the bank plans to increase its return on tangible equity significantly over the next couple of years.

For these reasons, I think it’s a stock that investors could consider.

But I reckon the time’s come for a re-think. The oldest annual report I can find for the bank is from 1990 — it runs to just 68 pages. If the Chancellor is serious about getting the UK economy growing again, maybe she should let companies focus on growing their earnings, rather than their annual reports?