Barclays profits plunge with 40 percent

Thursday 30 April 2020 15:26 CET | News

UK-based bank Barclays has announced profits plunged 40% in the first quarter of 2020 as the economic impact of coronavirus battered its customers and prevented them repaying their loans.

According to Evening Standard, the bank set aside EUR 2.4 billion to cover such debts, with a large chunk being set aside for credit card risks. Pre-tax profits crashed from EUR 1.7 billion in the first quarter of 2019 to almost EUR 1 billion, and the bank warned that the COVID-19 impact only came late into that period. Besides, the key measure of profitability came in at 5.1%, even if before the coronavirus pandemic the bank had hoped this would be more than 10%.

With consumers like SMEs which were trying to spend less and build up cash reserves, Barclays was one of banks raising funds, through the government's CBILS scheme, for UK businesses to get them through the financial crisis.

In the UK, the bank’s profit before tax was EUR 230 million against EUR 690 million in the same quarter of 2019 – a fall of 66%, hit by increased downwards pressure on margins and a reduction in fees for overdrafts and credit cards. So far, however, the bank has high levels of capital, with the key core equity tier 1 ratio only slipping from 13.8% in December 2019 to 13.1%.

Along with other UK banks, Barclays was ordered to cancel its dividend by the Bank of England due to fears banks would need to preserve capital in the face of the looming economic crisis.

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Keywords: Barclays, COVID-19, coronavirus, loans, banks, credit card, SMEs, CBIL, capital, UK, Bank of England
Categories: Banking & Fintech | E-invoicing, SCF & E-procurement
Countries: United Kingdom
This article is part of category

Banking & Fintech