Major bank Barclays have revealed the true extent of how coronavirus has impacted their business.
The bank revealed that they set aside £3.7 billion in the first half of the year in order to cover loan losses as the pandemic impacted customers and businesses across the country.
Barclay’s diversified its business model as a key part of its strategy to support customers through the coronavirus pandemic and they were able to use income from their investment bank to offset weaknesses elsewhere.
The bank’s financial results show how it set aside £1.6 billion to cover bad debts during the second quarter of the year as the lockdown in the UK came into full effect. Credit impairment charges and loan loss provisions came in around £200million over analysts expectations.
Barclays have said that their consumer business income ‘decreased by 11% in Barclays UK and 21% in CC&P (consumer, cards and payments)’ which was a result of lower interest rates, reduced payment activity and providing support to customers.
The support that Barclays offered its customers includes granting more than 600,000 payment holidays and delivering government loan schemes to help businesses through the crisis.
Barclays say that since late March they have helped to deliver around £22 billion of funding that includes 250,000 government-backed Bounce Back Loans that totalled around £7.7 billion. It’s also thought to have handed out £2.5 billion through the Coronavirus Business Interruption Loan Scheme (CBILS) where the bank shares some of the risk with the government.
The bank’s chief executive has reassured investors that the firm is in a good position despite recent challenges thanks to a previously flagged boost to its reserves. Shares have been down by more than a third this year to date however they did rise initially before falling 1% in early trading.