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Barclays waives £100m of interest and fees for coronavirus hit customers

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Written by: Lana Clements
23/10/2020
Barclays set aside an additional £608m in loss provisions and impairment charges in the third quarter of 2020, taking the total hit from the coronavirus to £4.3bn.

In its third quarter results, Barclays reported it had provided over 640,000 payment holidays to customers and waived around £100m of interest and fees for those who have struggled financially as a result of coronavirus.

It has also delivered some £25bn to UK businesses through the government support measures such as the Bounce Back Loans, Coronavirus Business Interruption Loan Scheme (CBILS) and the Covid Corporate Financing Facility.

Further, as at 30 September 2020, the group held a provision of £300m relating to PPI. Since the provision increase to £1.4bn in Q319, 96% of the items outstanding as at 30 September 2019 have been resolved, Barclays added.

Despite its coronavirus hit climbing to £4.3bn, CEO Jes (James) Staley said the bank expects the impairment charge in the second half of the year to be lower than the first half.

The group posted profit before tax for the first nine months of £2.4bn.

In the UK specifically, Barclays returned to profitability in the third quarter, with profit before tax of £196m.

There was £3.2bn of mortgage growth, but total income decreased 12% to £4.7bn.

Within this, Barclaycard Consumer UK income decreased 20% to £1.1bn, as reduced borrowing and spend levels by customers resulted in a lower level of interest earning lending balances, as well as planned lower debt sales.

The bank said “income headwinds” in the UK are expected to remain into 2021 and cited the low interest rate environment.

And the outlook “remains uncertain and subject to change depending on the evolution and persistence of the Covid-19 pandemic and the outcome of Brexit negotiations”.

Staley said: “In this historically challenging year for our customers and clients we have continued to provide huge support to help people through the social and economic impact of the Covid-19 pandemic. This remains a priority, alongside maintaining the financial integrity of the firm and keeping our colleagues safe.

“For customers, we have provided over 640,000 payment holidays globally, and this is in addition to some £100m of income foregone in the form of waived overdraft interest and banking charges for our UK customers and business banking clients.”

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