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Barclays on Wednesday reported a 42% fall in first-quarter net profit year-on-year and opted to take a £2.1 billion ($2.62 billion) credit impairment charge, as it attempts to anticipate the fallout from the coronavirus pandemic.
The British bank posted net profit attributable to shareholders of £605 million for the first three months of the year, down from £1.04 billion for the same period last year.
In the statement released Wednesday, the bank said its credit impairment charge “reflects our initial estimates of the impact of the COVID-19 pandemic.”
Here are the key highlights for the quarter:
- Operating expenses held at £3.3 billion, roughly the same as the first quarter of 2019.
- The closely-watched common equity tier one (CET1) capital ratio rose slightly to 13.1%, up from 13% in the first quarter of 2019.
- Return on tangible equity slid to 5.1%, versus 9.2% for the same period last year.
- Group pre-tax profit was £913 million, down 38% from $1.48 billion in the first quarter of 2019.
The economic impact of the crisis follows a prolonged period of macroeconomic uncertainty surrounding Brexit and the global trade environment, which has weighed on Barclays’ earnings in previous quarters.
The bank announced earlier this month that it would scrap its dividend and suspend share buybacks following pressure from the Bank of England.
This is a breaking news story and will be updated shortly.
