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(PA Graphics) <\/p>\nBarclays has revealed it set aside more than \u00a3800 million for bad debts related to the collapse of a mortgage lender and as it builds a buffer amid geopolitical turmoil despite reporting an uptick in earnings for the first quarter.<\/p>\n
The \u00a3823 million provision for loans expected to turn sour was increased from \u00a3643 million a year ago.<\/p>\n
The banking group\u2019s impairment charge was largely driven by a one-off loss surrounding a single company affecting its investment banking operations.<\/p>\n
It is understood that this refers to the collapse of UK property lender Market Financial Solutions (MFS) earlier this year amid allegations of fraud.<\/p>\n
Group chief executive CS Venkatakrishnan, known within the bank as Venkat, said he was \u201cdisappointed\u201d by the hit which related to a \u201cwell-publicised sophisticated fraud\u201d.<\/p>\n
\u201cThis fraud, as with the one in Tricolor, indicates to us the importance of strong financial controls of borrowers, and the difficulty of identifying fraud,\u201d he said.<\/p>\n
\u201cAs such, we are constraining lending to certain structured finance counterparties who operate more vulnerable business models and cannot convince us of the quality and independence of their financial controls.\u201d<\/p>\n
The bank suffered a separate impairment last year linked to the collapse of US subprime lender Tricolor.<\/p>\n
Venkat stressed that efforts to restrict lending to more risky borrowers were not having any significant impact on the business but that he wanted to \u201cgive our investors a sense of how we\u2019re thinking about the environment\u201d.<\/p>\n
Meanwhile, Barclays also warned that \u201cgeopolitical uncertainty persists\u201d which was reflected in the latest buffer.<\/p>\n
(PA Graphics) <\/p>\n
Venkat said the bank was \u201cvigilant about the inflationary impact of the rising energy crisis\u201d linked to the war in Iran.<\/p>\n
He added: \u201cThe higher oil prices and the longer it goes on will have an impact on the economy.<\/p>\n
\u201cWe do care \u2013 we\u2019ve not seen anything particularly yet in terms of credit weakness, but what we\u2019ve seen is that the inflation print in the UK has gone up.\u201d<\/p>\n
Nevertheless, Barclays reported\u00a0a pre-tax profit of \u00a32.8 billion for the first quarter of 2026, up 3% on the same period last year.<\/p>\n
This was driven by a 6% jump in income, with its UK bank, corporate division and investment bank all making more money, as well as its US consumer bank.<\/p>\n
UK lending increased by 5% year-on-year and card balances jumped by 8%.<\/p>\n","protected":false},"excerpt":{"rendered":"Barclays has revealed it set aside more than \u00a3800 million for bad debts related to the collapse of…\n","protected":false},"author":2,"featured_media":43222,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21264],"tags":[3343,21880,21883,21879,21881,21882],"class_list":["post-43221","post","type-post","status-publish","format-standard","has-post-thumbnail","category-barclays","tag-barclays","tag-financial-controls","tag-impairment-charge","tag-market-financial-solutions","tag-mortgage-lender","tag-venkat"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116610509421457916","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/43221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=43221"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/43221\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/43222"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=43221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=43221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=43221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}