Barclays suffered in the second quarter

0
10
Barclays suffered in the second quarter





© KEYSTONE/EPA/TAL COHEN


British bank Barclays on Wednesday reported a 91% drop in second-quarter net profit after having to set aside an additional £ 1.6 billion to deal with the risk of delinquencies stemming from the economic shock of the pandemic.

Net profit fell to 90 million pounds (107 million francs), according to a statement, while it fell 66% over the whole of the first half.

The bill linked to the health crisis is starting to be very high for the bank, which announced 3.7 billion in provisions in total in the first half of the year.

This money must allow it to face the risk of seeing its customers, individuals and businesses, not be able to repay the loans due to the recession caused by the shutdown of activity for weeks in the spring in order to stop the spread of the virus.

Barclays expects provisions to remain higher than in recent years by the end of the year, but lower than in the first half of the year due to the gradual recovery in the economy.

“Charges for overdue loans increased by £ 3.7 billion in the first half of the year due to the expected impact of Covid-19,” confirms James Staley, CEO of Barclays.

“While the rest of 2020 is going to be tough, our diversified model keeps our finances resilient and continues to support our clients,” he adds.

Barclays remains concerned, however, as the extent of the recovery is unknown at this stage and interest rates remain low around the world due to very accommodating monetary policies, which is weighing on its margins.

This is the reason why the bank will wait until the end of the financial year to decide on the payment of a dividend which mobilizes a lot of capital at a time when its finances are under pressure.

While UK retail banking suffered a loss of £ 123m in the second quarter, international investment banking remained largely profitable with net profit of £ 468m.

Barclays even managed to increase its profitability in its market activities thanks to an increase in its revenues in this branch.

LEAVE A REPLY

Please enter your comment!
Please enter your name here