Barclays pauses share buyback amid falling profits

Barclays has recorded a profit decline of £300 million in the first quarter of the year.

The bank said that it is suspending its share buyback programme with the intention to relaunch it “as soon as practicable”.

The delay to the programme comes as the British financial institution reports litigation and conduct charges of £0.5 billion relating to the “over-issuance of securities” by the bank in the US and customer remediation costs relating to a legacy loan portfolio.

The bank’s credit impairment charges nearly tripled from last year’s £55 million to £141 million in the first quarter. It said that the charges were driven by “ongoing flows to delinquency in unsecured lending”.

Barclays says that coverage levels were materially in line with the final quarter of last year and are considered appropriate given rising inflation and affordability headwinds.

It warned that the “ongoing geopolitical situation could put further pressure on already high levels of inflation” and “weigh on corporate profitability and consumer affordability levels”.

The bank added that with Covid-19 infection rates increasing around the world, labour shortages and supply chain constraints could be exacerbated.

“We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs,” said C. S. Venkatakrishnan, Barclays Group chief executive.

The Barclays boss added that in 2022 the bank will focus on “delivering next-generation, digitised consumer financial services, producing sustainable growth in the Corporate and Investment Bank (CIB), and capturing opportunities as we transition to a low-carbon economy”.

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