Oct 23, 2020
Barclays recovers as bad debt charges fall
Barclays reported a big drop in its provisions for bad loans in the third quarter as the initial economic shock from coronavirus subsided, while revenue at its trading arm continued to surge in turbulent markets. The bank took £608m of credit impairment charges in the quarter. Analysts had estimated Barclays' net profit would be £201m. Revenue fell 6 per cent to £5.2bn, beating expectations of £4.8bn. The majority of charges for potential loan losses came in the consumer and credit card businesses in the UK and the US. However, the bank did return to profit in that area in the third quarter as consumer spending recovered. Elsewhere in the investment bank, equity trading revenue rose even further - by 40 per cent, beating the average 15 per cent rise from US banks - but fees from M&A advisory plunged as few acquisitions were sealed during global lockdowns. Overall pre-tax profits at the investment bank rose 13 per cent to £1bn. UBS reported similarly buoyant performance at its securities unit earlier in the week.
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