COVID-19 Drags Down Barclays’s Profit by 66% in H1, 2020

Barclays Bank, one of British leading banks, on Wednesday said its first half of the year profit declined by 66 percent in the first half of 2020.

Barclays’s profit after tax declined to £695 million during the period under review, down from the £2.07 billion reported in the same period of 2019.

Accordingly, the lender’s net profit plunged by 91 percent or £1.6 billion to around £90 million during the period defined by COVID-19 lockdown and low economic activities.

“The COVID-19 pandemic has caused disruption to the Barclays Bank UK Group’s customers, suppliers and staff,” it said in Wednesday’s statement.

“In the UK severe restrictions on the movement of people have been implemented by the UK, Scottish and Welsh governments, with a resultant significant impact on economic activity.”

Chief Executive Officer, Barclays Bank, Jes Staley said: “This has been a period focused on supporting our customers, clients and the UK economy through the Covid-19 pandemic – providing the people and businesses that we serve with a bridge to recovery in every way we can.”

He added: “To help consumers with their short-term household finances more than 600,000 payment holidays have been provided along with other fee waivers and support measures.

“Our consumer business income decreased by 11% in Barclays UK … as a result of the lower interest rate environment, fewer interest earning balances, reduced payments activity and action to provide support for customers.

“Credit impairment charges increased to £3.7 billion in the first half due to the forecast impact of Covid-19. However, our improved pre-impairment performance ensured that we still delivered £1.3 billion profit before tax for the first half of 2020, post impairment.

“While the remainder of 2020 will be challenging, our diversified model means we can remain financially resilient and continue to support our customers and clients.”