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Barclays chief CS Venkatakrishnan stated the financial institution would restrict its complicated lending actions and cut back its publicity to extremely leveraged corporates because the lender introduced it had taken a £228mn hit from the collapse of UK mortgage supplier Market Monetary Options.
Venkatakrishnan stated on Tuesday the FTSE 100 financial institution would cease lending to structured finance counterparties that can’t display sturdy monetary controls.
“In these instances, however particularly in the event that they’re extra area of interest gamers working in components of the market that are extra cyclically susceptible and the place we can’t be absolutely satisfied of the standard of their controls, we’re proscribing lending,” he stated on a media name on Tuesday for the financial institution’s first-quarter outcomes.
MFS collapsed in February amid allegations of fraud. Its demise, lower than six months after the back-to-back failures of First Manufacturers Group and Tricolor Holdings within the US, reignited fears of lax underwriting requirements in asset-backed lending.
Barclays additionally suffered a £110mn loss from its publicity to subprime lender Tricolor that it disclosed in October. Venkatakrishnan stated on the time that lenders must be ready for all outcomes “together with fraud”.
MFS got here below strain a month later when Barclays, which additionally supplied banking providers to the group, began blocking transactions, setting off a series of occasions that ended with the enterprise sinking into administration.
The hit on lending associated to MFS drove Barclays’ credit score impairment prices within the first quarter to £823mn, a rise of greater than 1 / 4 from the identical interval final yr.
Regardless of the costs, Barclays’ pre-tax income rose 3 per cent to £2.8bn within the first three months of 2026. The British lender’s revenues rose to £8.2bn, up from £7.7bn throughout the identical interval final yr.
Venkatakrishnan referred to as it a “strong quarter” because the financial institution introduced a recent £500mn share buyback.
Barclays’ funding financial institution delivered a muted efficiency with revenues up 4 per cent yr on yr to £4bn because the unit did not seize massive positive factors from the buying and selling increase in fastened earnings that powered earnings at lots of its US friends.
The financial institution doesn’t have a commodities desk, which restricted its participation in one of many busiest buying and selling areas because the outbreak of the Iran conflict on the finish of February.
Revenue from buying and selling fell 2 per cent whereas internet curiosity earnings contained in the unit was up 29 per cent.
Nonetheless, advisory and fairness capital markets revenues had been up 78 per cent and 31 per cent respectively.
Return on tangible fairness, a key measure of profitability, fell to 13.5 per cent, from 14 per cent within the first quarter of final yr.
Barclays shares fell 3.4 per cent in early buying and selling earlier than paring losses to commerce 1.4 per cent decrease by early afternoon.
