Barclays warns pandemic could cost it £2.1bn

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Barclays has warned the coronavirus pandemic could cost it some £2.1bn, largely due to customers being unable to repay their loans.

The firm said it was setting the money aside to cover its “initial estimates” of the impact of the virus.

The resulting impairment charge meant its profits for the first three months of 2020 dived 38% to £913m, it said.

On Tuesday rival lender HSBC reported a 50% fall in profits linked to the pandemic.

HSBC had forecast that bad loans would rise to $3bn (£2.4bn) due to customers not being able to repay them during the crisis.

Barclays said on Wednesday the impact of the pandemic “came late in what was until that point a good quarter”.

But it said it that despite the challenging environment, it was well placed to get through the crisis.

“We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the Covid-19 pandemic,” said boss Jes Staley.

“Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging,” he added.

UK banks have been making loans as part of efforts to stave off the coronavirus hit to the UK economy.

The bank said it had already given 3,760 business loans valued at £737m, as well as granting 238,000 customers mortgage and loan payment holidays.

It also said more than six million customers and clients were currently paying no personal overdraft or business banking charges.

Source: BBC

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