London (Reuters) – The British bank Barclays did better than expected in the third quarter thanks to a sharp fall in provisions for bad loans.
Before taxes, profit rose to 1.1 billion pounds (1.2 billion euros) from 246 million in the same quarter last year, as Barclays announced on Friday. That was almost twice as much as analysts expected, the shares rose by almost seven percent. The numbers also give tailwind to Barclays boss Jes Staley, who is holding on to his post. “I think we’ll be here for a few more years,” he said on a conference call with analysts.
Staley has headed the bank since 2015. Most recently, there has been speculation that he is about to leave as he has been targeted by British regulators for his links to the late US banker and sex offender Jeffrey Epstein. The investigation, which began in February, continues. In addition, Staley was on fire because he stuck to investment banking, which had been ailing for a long time, against the resistance of large shareholders.
But in the summer months Barclays, like the competition, again profited from the flourishing business with bonds, stocks and foreign exchange. The division’s income increased by 29 percent. The main drivers for the unexpectedly high increase in profits were the low burdens from bad loans, which fell 63 percent to 608 million pounds compared to the second quarter. Analysts had expected a billion pounds in provisions.
But the prospects are dim. The corona pandemic has Great Britain firmly under control, and there are lockdowns in more and more parts of the country. Barclays is now expecting the UK’s economic output to slump by 10.3 percent this year; in June it had only expected a decline of 8.7 percent. The bank is considering further cuts and the cost of these renovations could weigh on future results.
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