Barclays Bank has distributed 640,000 payment holidays to customers affected by Covid-19 restrictions and approved £ 25 billion worth of credit and support.
The bosses warned, however, that the negative interest rates used to prop up the UK economy could affect lending profits stalled after the last financial crisis.
Board chairman Jes Staley declined to rule out bonuses for his employees this year despite being unable to pay dividends to shareholders due to the Bank of England’s Covid-19 rules.
He also said negative interest rates, set by the Bank of England, could have the potential to improve the economy in the long run if that led to higher spending.
Mr. Staley said, “Zero, let alone negative, interest rates are very tough on banks and put bank profitability under pressure.”
He added, “You don’t want consumers to avoid a negative interest rate turning into cash, for example.”
Do me a favor: please SHARE this post.
The boss also said that in countries where negative interest rates have already been introduced, Barclays’ large corporate customers have been charged fees for holding savings. “But we’d rather not,” added Staley.
No bank branches will be closed on the UK’s main roads due to the pandemic, although Barclays will continue to close branches as part of cost-cutting plans announced prior to Covid-19.
Barclays also announced that it waived £ 100 million in interest and fees for UK customers during the pandemic and provided the same amount in community aid packages.
A total of 9,800 payments were approved for the Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBLS) valued at £ 3 billion. 80% of the loans are covered by the government.
Around 296,000 small business bounce-back loans worth £ 9.2 billion, 100% taxpayer backed, have also been approved, along with £ 12.4 billion from the Bank of England operated Covid Corporate Financing Facility (CCFF).
The tremendous support for UK businesses came when Barclays announced that the World Bank’s revenues rose 3% to £ 16.8 billion in the nine months to September 30th, on pre-tax profits of £ 2.4 billion , including £ 1.1 billion in the third quarter.
Profits in the investment division and high street lending rose over the three month period as the world economy recovered from the height of the global pandemic.
Barclays said its preferred measure – the return on tangible equity (RoTE) based on gains on cash invested in the bank – rose to 5.1% in the three months to September 30.
The increase in the investment division, however, was larger at 10.2% than in the fenced main transport service at a modest 4.5%.
The UK division posted a pre-tax profit of £ 196 million.
Mr. Staley said, “In this historically challenging year for our customers and customers, we have continued to provide great support to help people with the social and economic impact of the Covid-19 pandemic.
“This remains a priority along with maintaining the company’s financial integrity and the safety of our colleagues.”