Barclays profits drop as it flags cost of living crisis

·Finance Reporter, Yahoo Finance UK
·2-min read
A branch of Barclays Bank is seen, in London, Britain, February 23, 2022.  REUTERS/Peter Nicholls
Barclays posted a 7% fall in quarterly profits. Photo:Peter Nicholls/Reuters

Barclays (BARC.L) profits dropped 7% to £2.2bn as the lender warned about difficulties households and businesses face amid the cost of living crisis.

The high street bank reported a profit before tax of £2.2bn for the first three months of 2022, down from £2.4bn a year ago.

Read more: Barclays to buy back £1bn of shares and raise dividend as profit soars

It booked a charge of £141m for borrower arrears, more than double the £55m a year ago as the cost of living crisis begins to hit customers.

But the group said arrears are set to remain lower than those seen before the pandemic thanks to lower levels of more risky unsecured lending.

"We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs. We will support them through this difficult period wherever we can, and support the wider economy just as we did through the COVID-19 pandemic," Barclays CEO CS Venkatakrishnan, said.

Read more: Barclays raises $687m from Absa shares sale

The British bank has also put its share buyback plans on hold pending discussions with US regulators over a possible restatement of its 2021 earnings.

Barclays recently admitted to selling more products to investors in the US than it was allowed to, triggering an estimated £450m loss and regulatory scrutiny.

"Barclays remains committed to the share buyback programme and the intention would be to launch it as soon as practicable following resolution of filing requirements being reached with the SEC," the bank said.

Costs in the quarter jumped to £4.1bn from £3.6bn a year ago.

Watch: Barclays posts record annual profit

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