Western Daily Press (Saturday)
UK heading for biggest boom since 1948: Staley
THE country is about to experience its biggest economic boom since the aftermath of the Second World War, said the boss of Barclays.
Jes Staley’s assessment came as Barclays enjoyed a record quarter at the start of 2021, hitting pre-tax profits not seen in 13 years.
“We estimate the UK economy will grow at its fastest rate since 1948. That’s pretty spectacular,” Mr Staley told the BBC.
Mr Staley said that a combination of the successful vaccine rollout and Barclays’ estimate of an extra £200bn sitting in customer and company bank accounts meant the UK would join the US in seeing some of the fastest economic growth in decades.
Barclays bosses said the £2.4 billion pre-tax profit for the first three months of the year came through strong growth in its corporate and investment banking division and an improved mortgage book.
The bank’s high street division had a mixed period as the recent lockdowns reduced consumer spending, but the stamp duty holiday continued to help the housing market and its mortgage division.
Impairment charges - money put aside in case of defaulting loans were also significantly reduced as the economy improved and the postpandemic outlook appeared more stable compared with a year ago.
The charges for the quarter were just £55 million compared with £2.1 billion a year ago, although, unlike rivals NatWest and Lloyds, Barclays said it will not release the provisions just yet.
Mr Staley said: “Since the early days of the pandemic last year, our diversified business has demonstrated the resilience critical to ensuring Barclays’ financial integrity.”
He pointed out that the corporate and investment bank (CIB) had a particularly strong quarter, with income of £3.6 billion, and return on tangible equity (RoTE) - the bank’s preferred measure - was 17.9%.
Mr Staley added that the CIB growth “partially offset challenges in our consumer businesses that have been impacted by lower spend and activity levels as a result of the pandemic”.
Barclays UK saw income of £1.6 billion - down 8% - as savings and spending during the lockdown slowed, although its mortgages grew by £3.6 billion to £151.9 billion.
Mr Staley added: “As we enter the next phase of this pandemic, we remain resolute in our commitment to support the economic recovery.
“From our spend data, which captures UK economic activity across our cards and acquiring businesses, we are already seeing encouraging early signs of recovery in some sectors, including those hit hardest by the crisis.”
A finance partnership with Amazon, first launched in Germany, will also be extended to the UK.