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Barclays post-Brexit lending up 8% as H1 delivers strong results

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  • 29/07/2016
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Barclays post-Brexit lending up 8% as H1 delivers strong results
Barclays’ half yearly gross mortgage lending climbed 4% to £9.9bn and has continued with strong momentum after the Brexit vote with £2bn of residential mortgages completed since 24 June.

Jes Staley, chief executive of Barclays, said this was an 8% increase on the same period last year and made assurances that Barclays would play its part in supporting the UK by continuing to lend.

Ahead of the EU referendum, said Staley, Barclays was in a strong capital position and extremely liquid. He said the bank wanted to be ‘a centre of stability and safety’ during the uncertain economic conditions and for this reason it would continue its conservative approach to credit.

Staley said the mortgage portfolio was ‘extremely conservatively managed’ in terms of its loan-to-value levels (LTV).

The bank’s average LTV on new lending was 63%, with 9% of new mortgages advanced at LTVs above 85%.

Barclays said it had identified a potential credit risk from the possibility of UK recession as a result of voting to leave the EU. It said the risk of  lower growth, higher unemployment, and falling house prices could negatively impact a number of its portfolios, noteably its higher LTV mortgages and UK unsecured and commercial real estate exposures.

Its total loan book, as of 30 June, stood at £127bn, which has shrunk by 0.2% since December.

Of total balances outstanding, 31% were interest-only owner-occupied mortgages, which was a slight reduction on the previous year when interest-only accounted for 32%. Buy-to-let mortgages accounted for 9% of the book and remained static year-on-year with an average LTV of 52%.

The bank suffered a 21% loss in profit before tax ending the H1 period on £2.63bn which it said was driven by losses from its non-core business activity, which it continues to sell off as part of its long-term strategy.

 

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