Banks feel the draft...
Barclays & Santander in doldrums
BRITISH banks were in the doldrums yesterday as Barclays slumped to a £1.2billion loss, and Santander warned of a consumer slowdown.
Barclays posted a firsthalf loss compared with a £1.1bn profit in the same period last year, blaming a £2.5bn hit from the sale of its African arm and another £700million bill to meet PPI compensation payments.
Barclays’ total PPI bill now stands at £9.1bn.
Chief executive Jes Staley said the bank’s structural overhaul was now over. He said: “Our business is now radically simplified and while we are working to put conduct issues behind us, we can now focus on what matters most to our shareholders, which is improving returns.”
Staley added that the bank was “open for business” despite the Bank of England’s recently publicised concerns on the rise in consumer credit. “Impairment numbers we are seeing are not a concern at this point,” he said.
Santander, which reported flat first-half UK profits of £1bn, said it saw “greater uncertainty” in the economy later this year and into 2018. “The labour market remains strong, but higher inflation, largely from the lower value of sterling is now reducing households’ real earnings,” it said. “This is likely to result in lower consumer spending growth.”
Santander took a £69m charge to cover PPI claims but suffered a £200m hit in net mortgage lending after it withdrew some of its most competitive rates at the end of last year. Net consumer lending, such as car loans and credit cards, also fell.
Chief executive Nathan Bostock said: “We continue to make strong progress against the backdrop of a changeable operating environment. Our focus on cost efficiency and a prudent approach to lending should ensure we remain resilient.”