Barclays posts 38% slide in net profit for 2020 as provisions for bad loans offset strong investment banking performance
Barclaysreported a 38% drop in full-year net profit due to higher reserves to cover potential bad loans.
UKlender posted a 45% rise in marketsrevenue for the year.
- The bank will resume dividend payouts and commence a £700 million share buyback within weeks.
The British bank said it would resume paying dividends of 1 pence ($0.01) per share and commence a £700 million ($971 million) share buyback within weeks, after having to suspend payouts at the request of the Bank of England last year.
Full-year net profit fell to £1.53 billion ($2.1 billion), down 38% from the year-ago period. That was still better than the full-year net profit estimate of £1.22 billion ($1.6 billion) expected by analysts polled by Refinitiv.
Barclays posted a better-than-expected 45% rise in markets revenue for the year.
Below are the key numbers for the bank's fourth-quarter of 2020:
- Corporate and investment bank revenue: £2.6 billion ($3.6 billion) versus £2.5 billion ($3.4 billion) expected
- Adjusted pretax profit: £693 million ($963 million) versus £386.4 million ($537 million) expected
- EPS: 8.8 pence versus 14.3 pence last year
Barclays said in a statement: "Headwinds to income in Barclays U.K. are expected to persist in 2021 and the medium-term. The bank took a £492 million ($684 million) charge to anticipate loan defaults due to the pandemic, bringing the total for the year to £4.8 billion ($6.6 billion).
It's a good sign that the UK lender has resumed dividend payments, said Adam Vettese, an analyst at multi-asset investment platform eToro. But if the economy falters again then bad debts could become a problem not just for Barclays but the UK banking sector as a whole, he said.
Shares in Barclays fell 0.8% in early European trading.
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