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Barclays mortgage lending drops to £22.7bn as pre-tax profits fall by a third

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  • 18/02/2021
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Barclays mortgage lending drops to £22.7bn as pre-tax profits fall by a third
Barclays' new mortgage lending fell to £22.7bn in 2020, slightly down from £25.3bn the previous year.

 

The contraction aligned with market-wide figures from the Bank of England which showed gross mortgage lending fell 10 per cent annually from £267.7bn to £241.2bn in 2020.

Its mortgage book ticked-up to £148.3bn, a year-on-year increase from £143.2bn.

Overall, Barclays reported a 30 per cent drop in profits before tax for 2020 to £3.1bn from £4.4bn the year before.

The bank attributed the decline to an increase in impairment charges due to the “deterioration in economic outlook” as a result of the Covid-19 pandemic. 

Its UK business reported a 78 per cent decrease in profit before tax to £578m, with £278m of that being generated in the final quarter of the year.   

Barclays UK also saw a 14 per cent reduction in income to £6.3bn which it said reflected lower unsecured lending balances, interest rates and Covid-19 customer support. However, it said its drop in income was partially offset by growth in its mortgage business. 

Its net interest margin increased five basis points quarterly to 2.56 per cent. For the full year, this figure stood at 2.61 per cent compared to 3.09 per cent in 2019.

Barclays said it expected margins to drop to 2.4 per cent throughout 2021 due to downwards pressure caused by low interest rates. 

Jes Staley (pictured), group CEO of Barclays, said: “Throughout the pandemic we have focussed on preserving the financial and operational integrity of the firm so that we can maximise our support for clients and customers, for colleagues, and for the communities in which we live and work. 

“Last year demonstrated the value of our diversified banking model, delivering resilient group results even in a difficult macroeconomic period, driven by the performance of our corporate and investment bank.” 

 

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