Barclays has made a mammoth reservation for bad loans following hostilities in the global market leading to a drag on the bank’s profit growth. The blue-chip lender set aside £823m for potential loan losses, up from £643m in the same period last year, in a stark sign the firm was
Samuel Norman
Tuesday 28 April 2026 7:20 am
Barclays has made a mammoth reservation for bad loans following hostilities in the global market leading to a drag on the bank’s profit growth.
The blue-chip lender set aside £823m for potential loan losses, up from £643m in the same period last year, in a stark sign the firm was bracing for an economic crunch.
The bank’s charge fell broadly in line with what Barclays was expected to set aside, as banks build up their buffer following the turmoil in Iran that has triggered fears of a global energy shock.
Still, Barclays managed to eke out a three per cent increase in pre-tax profit at £2.8bn, falling in line with analyst consensus. It was also modestly up from the £2.7bn scored in the same period last year, though some growth was held back by the provision.
The bank’s revenue came in at £8.2bn, up six per cent year-on-year.
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Barclays’ net interest margin – a key indicator of its profitability from lending – swelled to 4.83 per cent from 4.51 per cent previously. The expansion was attributed to higher income from its structural hedge – a strategy used to protect income from interest rate volatility – and “partner reward updates” within the US Consumer Bank.
Barclays investment bank posts a boom and blip
Amidst the volatility, Barclays’ investment bank proved once more to be the standout performer.
Read more FTSE 100 banks £16bn payday to face economic reality check
The division secured just north of £4bn in total income, marking the first time quarterly income as done so. But pre-tax profit came in at £1.6bn, primarily due to impairment charges.
The investment banking division recorded a charge of £279m but £228m of this – around 82 per cent – was cited as coming from a single name charge related to a specific corporate client.
Barclays was tipped to cash in on the market volatility of the first-quarter that was triggered by the US and Israel’s war with Iran.
The bank’s mammoth markets division served as a shield to economic turmoil as it shored up extra profit from the trading frenzy. Jefferies analysts estimate the bank’s income from high-speed market volatility trading is 3.5 times larger than the fees pocketed from traditional investment banking.
Markets were rocked in the first few months of the year as global indexes tumbled whilst energy prices rocketed. The nerves saw the FTSE 100 slip under the 10,000 milestone, whilst Barclays own share price has taken a ten per cent hit since the start of the year.
The investment banking haul of the first-quarter of 2026 echoes a similar fate to 12 months prior, where Barclays scored a £2.7bn pre-tax profit, ahead of analyst expectations.
Read more Barclays and Deutsche most at risk to private credit ‘profit blow’
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