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Barclays reported that its Q1 net profit had plunged 42% year-on-year and it decided to take a credit impairment charge. Meanwhile, BCS stock is up.British multinational bank and financial services company Barclays PLC (NYSE: BCS), earlier today reported that its Q1 year-on-year net profit had plunged 42% and now wants to take a credit impairment charge worth £2.1 billion as it tries to waive the effect of the pandemic. However, Barclays stock is rising today. It is up around 13% and is trading at .50.The firm posted stakeholders’ net profit worth £605 million in the Q1 of the year. It was unlike 2019 when Q1 net profit that was declared worth £1.04 billion.The bank in a release announced that its credit impairment charges show how they calculate the effects coronavirus will have.In an
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Barclays reported that its Q1 net profit had plunged 42% year-on-year and it decided to take a credit impairment charge. Meanwhile, BCS stock is up.
British multinational bank and financial services company Barclays PLC (NYSE: BCS), earlier today reported that its Q1 year-on-year net profit had plunged 42% and now wants to take a credit impairment charge worth £2.1 billion as it tries to waive the effect of the pandemic. However, Barclays stock is rising today. It is up around 13% and is trading at $5.50.
The firm posted stakeholders’ net profit worth £605 million in the Q1 of the year. It was unlike 2019 when Q1 net profit that was declared worth £1.04 billion.
The bank in a release announced that its credit impairment charges show how they calculate the effects coronavirus will have.
In an interview, the bank’s CEO Jes Staley said that the impairment charge was very high because the system that was adopted was similar to the bank’s consumer business and calculated on a tough economic situation. It considered unemployment, GDP to conclude the charge.
Staley said that at the end of the day, they got a 5.1% return on tangible equity plus a profitable quarter, which makes them happy with how they read the situation.
Major Highlights of Barclays Q1 Operations
In Barclays Q1 operations, there are certain activities worth mentioning which one way or the other helped the firm’s stock to rise amidst its 42% fall in year-on-year net profit.
The bank’s operating expenses remained at around £3 billion. This is around the same amount it recorded in Q1 2019. Also, the firm’s common equity tier one which is monitored very closely soared to 13.1%. A 0.1 rise from what was recorded Q1 last year.
However, return on tangible equity plunged to 5.1%, unlike 9.2% recorded in Q1 2019. Also, group pre-tax profit totaled £913 million, a 38% decrease from Q1 last year.
Barclays Corporate and Investment Bank (CIB) with its strong performance-inspired group income to rise by 20% year-on-year to £6.3 billion. Its Fixed income, currencies, and commodities, however, hiked 106% £1.86 billion.
Stanley, in the interview, said that consumer business was cool as a result of the economic infractions. He noted, however, that its void was filled by corporate and investment banks, which was very fat, especially investment banks.
He said that it is evident from the coronavirus pandemic, the capital market recovery occurred. This is a result of a large amount of issuance and financing, which has been happening there.
Muhaimin is a journalist, a fintech and crypto enthusiast who is passionate about its development in Africa and across the globe. Muhaimin derives pleasure in reporting and analysing happenings in the crypto world and a believer in Blockchain technology.