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Barclays reports jump in profit on absence of PPI charge

By BFN News | 07:46 AM | Friday 23 October, 2020

Barclays reported a jump in third-quarter profit as the bank set aside less money to cover bad debts and saw no recurrence of payment protection insurance provisions that had weighed on profit in the prior-year period. For the quarter ended 30 September, pre-tax profit rose to £1.1 billion from £0.2bn, even as income fell 6% to £5.2bn year-on-year. The bank attributed the rise in profit to 'the non-recurrence of the 2019 PPI provision.' The credit impairment charge was £0.6 billion, up 32% versus the prior year but down 63% versus prior quarter. The bank's common equity tier 1, or CET1, ratio rose 40 basis points to 14.6%. Its international business saw income rise 1% to £3.8 billion, while income at Barclays UK fell 16% to £1.6 billion versus prior year but up 6% versus prior quarter. 'Barclays UK also returned to profitability in the third quarter, with profit before tax of £196 million, as economic activity recovered from the spring low point and impairment charges reduced,' the company said. Net interest margin was stable at 2.51%, up from the 2.48% seen in the second quarter. Looking ahead, Barclays said it expected headwinds including the low interest environment to continue to weigh on its UK performance, though it also estimated a sharp drop in impairment charge for the second half. 'Provided macroeconomic assumptions remain consistent with expectations, we expect the H220 impairment charge to be materially below that of H120 and it is likely that the full year 2021 impairment charge will be below that of 2020,' Barclays said. Story provided by

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