High street and commercial bank Barclays is doing well but less well than its US and European rivals, in part thanks to the collapse of a little-known bridging-loan specialist.
Barclays is profiting billions – £2.8bn before tax from January to March – but it’s put aside £228m to deal with the collapse of Market Financial Solutions, an issuer of complex property loans.
Its fall into administration in February spooked other lenders and raised questions about risk checks more broadly.
Putting money aside means Barclays is preparing itself in case some of its loans may not be repaid in full.
Meanwhile, US and European banks have been booking bumper profits.
Investors appear more focused on Barclays’ readiness for bad loans, more so than its profits and newly announced share buyback scheme: its share price is down 0.2% so far today.
Clearly, there’s worry that lending standards have slipped.
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