Barclays CEO Staley Says Bad Loan Concern Is Diminishing

Barclays Plc Chief Executive Officer Jes Staley said the bank is increasingly optimistic about the multibillion-dollar loan books it feared could sour because of the pandemic.

“Concerns around impairment will come down quite a bit,” Staley said in an interview at Bloomberg’s Qatar Economic Forum broadcast on Wednesday. “We have a very large impairment reserve as we were very conservative last year and, given what we see right now with the economy, that gives us a lot of cushion.”

Rival British banks including Lloyds Banking Group Plc and NatWest Group Plc have already begun to release some of the provisions they built up in anticipation of bad loans as Covid-19 battered the economy. Barclays, though, has kept the 4.8 billion pounds ($6.7 billion) it set aside last year. Staley had previously said the bank could free up some funds during 2021 if activity rebounded.

Barclays CEO Staley Says Bad Loan Concern Is Diminishing

“I’m actually quite encouraged, as we go to the second half of this year, that economic growth is going to be robust, and we’re going to come out of this pandemic,” said Staley.

Following the rapid shift to home working during the outbreak, Barclays is now reviewing its real estate needs in order to trim costs and adapt to hybrid work patterns. “I would be surprised if most people are in more than four days a week,“ said Staley.

“We want people to come into the office” while retaining some flexibility, he added. “We have a lot of people coming into work around the world. Our trading desks have about 60 to 70% occupancy.”

In recent months, those traders have seen “a softening of market volatility” that fueled record profits earlier in the year, while activity in equity capital markets and advisory “has been quite robust,” according to Staley. His comments come after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon recently signaled a 38% decline in trading revenue.

Staley is awaiting news from the Bank of England on whether lenders will be permitted to pay dividends at their half-year earnings in the coming weeks. “We fully intend” to return excess capital to shareholders, he said.

©2021 Bloomberg L.P.

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