Barclays profits suffered as bank sets aside £ 1.6bn for Covid-19 loan losses | London Evening Standard


arclays has set aside an additional £ 1.6bn in the second quarter to cover the cost of loans it says could go wrong due to the coronavirus crisis.

The bank said the impairment charge meant it had recorded pre-tax profit of £ 1.27bn in the second half of the year, down significantly from £ 3bn in the same period in 2019.

It generated sales of £ 11.62 billion in the first half of the year.

Analysts expected the depreciation to reach around £ 1.4 billion in the last quarter. Barclays took a £ 2.1 billion depreciation in the first quarter of the year.

Managing Director Jes Staley said: “This period has been focused on supporting our customers, customers and the UK economy throughout the Covid-19 pandemic – by providing people and businesses that we are serving as a bridge to recovery in every way we can. “

He added: “To help consumers manage their household finances in the short term, more than 600,000 payment holidays have been granted, along with other fee waivers and support measures.

CEO Jes Staley says 2020 will be a challenge / REUTERS

“Our trading revenues decreased by 11% at Barclays UK… due to the lower interest rate environment, lower interest bearing balances, reduced payment activity and support measures to customers.

“Credit impairment charges increased to £ 3.7 billion in the first half of the year due to the expected impact of Covid-19. However, the improvement in our pre-impairment performance enabled us to achieve a pre-tax profit of £ 1.3 billion for the first half of 2020, after impairment.

“While the rest of 2020 will be difficult, our diverse model means we can remain financially resilient and continue to support our clients and clients. “

In better news, Barclays’ investment banking division had a strong performance.

The Fixed Income, Currencies and Commodities division was the unit’s best performer with a 60% increase in revenue to £ 1.4 billion in the second quarter.

While the Markets division recorded a 49% increase in revenue to £ 2.1 billion.

The strong performance of the investment bank supports Staley’s strategy of maintaining the bank’s diversified business model, contrary to the wishes of activist investor and main shareholder Edward Bramson, who wants Barclays to scale back operations to cut costs. .

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