Barclays takes further £1.6bn hit from Covid-19 pandemic

Barclays has taken a further £1.6bn hit from the coronavirus crisis in the second quarter of the year even as the investment arm of the bank managed to keep it in profit.
Barclays will report a pre-tax profit of 1.27bn in the first half of the financial yearBarclays will report a pre-tax profit of 1.27bn in the first half of the financial year
Barclays will report a pre-tax profit of 1.27bn in the first half of the financial year

The bank will report a pre-tax profit of £1.27bn in the first half of the financial year, down from £3bn the year before. It came on revenue of £11.62bn in the first half of 2020.

Analysts had been expecting the impairment charge to reach a little over £1.4bn as the company prepared for an increase in bad loans.

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Earlier this year, Barclays revealed a £2.1bn hit in its first quarter, citing the impact of coronavirus. It takes the total impairment for the first half to £3.7bn.

However, while the retail arm of the bank saw a major hit from the coronavirus, the bank's corporate investment arm reported a 31 per cent jump in income to £6.9bn.

It helped keep Barclays in the black during the first half, and will be seen as a win for chief executive Jes Staley's "diversified model".

Mr Staley said: "Credit impairment charges increased to £3.7bn in the first half due to the forecast impact of Covid-19. However, our improved pre-impairment performance ensured that we still delivered £1.3bn profit before tax for the first half of 2020, post impairment.

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"While the remainder of 2020 will be challenging, our diversified model means we can remain financially resilient and continue to support our customers and clients."

The bank has been a major lender in schemes to help small businesses through the coronavirus crisis.

On Wednesday it revealed that coronavirus loans worth £10.2bn had been given to Barclays customers under three Government-backed schemes.

The schemes - Bounce Back Loans, Coronavirus Business Interruption Loans (CBILS) and the CLBILS scheme for bigger firms - were in part backed by the Treasury which promises to shoulder some of the interest and other burdens.

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Mr Staley said: "This has been a period focused on supporting our customers, clients and the UK economy through the Covid-19 pandemic - providing the people and businesses that we serve with a bridge to recovery in every way we can.

"To help consumers with their short-term household finances, more than 600,000 payment holidays have been provided, along with other fee waivers and support measures."

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