Profits at Barclays ( BARC.L), dropped by 7% to £2.2bn, as the lender warned of the difficulties that households and businesses will face during the cost-of-living crisis.
The bank, which is a high-street bank, reported a profit before taxes of £2.2bn in the first three months of 2022, a decrease of £2.4bn last year.
As the cost of living increases, the company charged a £141m charge for arrears. This is more than twice the £55m it collected a year ago.
All three banks, Natwest, Lloyds and Barclays are set for huge profit drops
The group stated that arrears will remain lower than they were before the pandemic because of lower levels of risky unsecured loans.
“We will continue to be focused on the effect higher prices have on our customers, small businesses, and corporate clients. All of them are facing much harder times this year due to inflation, supply chain problems, and higher energy costs. “We will support them during this difficult time wherever we can, as well as the wider economy, just like we did through the COVID-19 Pandemic,” Barclays CEO CS Venkatakrishnan, said.
In the meantime, discussions with US regulators regarding a possible restatement in its 2021 earnings have been held by the British bank.
Barclays admitted selling more products than it was allowed to US investors, prompting a loss of £450m and regulatory scrutiny.
The bank stated that Barclays is committed to the share buyback program and would launch it as soon as possible after a resolution to filing requirements with the SEC.
The quarter’s costs increased from £3.6bn to £4.1bn last year and jumped to PS4.1bn this quarter.
