The collapse of outsourcing giant Carillion has cost Barclays £127m. The charge was one of a number of hefty one-off costs contained in Barclays’ latest results. Last year, the bank lost £2.5bn related to the sale of Barclays Africa Group and a £900m charge related to changes in US tax rules. Including those costs the bank lost £1.9bn last year. But with one-off charges stripped out, underlying profits were £3.5bn, up 10%.
Carillion collapsed in January with debts estimated at £1.5bn. It was the second biggest UK construction company and Barclays was one of five key lenders to the company. Barclays, along with HSBC, voted in favour of lending more money to Carillion just days before it collapsed. But other banks voted against, sealing the company’s fate.
Barclays said the “bulk” of a £127m charge on its latest quarterly accounts related to Carillion. However, it is thought that of the five big lenders to Carillion, Barclays had the smallest exposure. Barclays’ results last year were boosted by a reduction in costs over the year and the rise in the value of the dollar and euro against the pound.
Chief executive Jes Staley said he was “pleased” with how this year had started. In particular, he mentioned an encouraging performance for the bank’s markets unit, which sells and trades shares, debt and other financial products. Last year, that unit saw income tumble 15% to £4.5bn. The markets division is part of Barclays Investment Bank, which saw income slide by 22% to £2bn.
Original Article: http://www.bbc.co.uk/news/business-43152466