29 November 2007
Customers are not suffering as much with personal debts as has been feared, Barclays said yesterday.
In fact, in a trading statement ahead of its 2007 earnings declaration, the bank said that debt charges for customers taking out unsecured credit such as personal loans "continued to improve".
Barclays had previously revealed its exposure to the US sub-prime mortgage sector - the collapse of which this summer triggered the global credit crunch and caused turmoil on markets worldwide - through its writing off of £800 million of the mortgages.
However, this loss - and the additional £30 million in bank charges repaid to customers so far this year - seems to have failed to make much of a dent in Barclays' earnings.
The bank revealed that its investment organisation Barclays Capital - which might have been expected to be particularly badly hit by the credit crunch - has hit profits of almost £2 billion in the first ten months of they year alone.
In total, the bank has earned a pretax profit of £4.1 billion so far - 12% up on last year - the trading statement added.
Despite the bank's customer reassurances, a uSwitch report released earlier this week suggested that UK consumer debt in general was on the up.
According to the study, 23% of Britons say that their level of borrowing - in mortgages and personal loans - is becoming unmanagable.
The full 2007 results for Barclays are published in February 2008.