Sub-prime write-down at Barclays
Barclays, Britain’s third largest bank, said its investment bank unit made a £1.3 billion write-down due to its exposure to credit market problems in the 4 months to the end of October.
Barclays will write down £500 million for the July-September quarter and a further £800 million write-down for October. The write-down was less than many predicted in terms of Barclays’ exposure to problems.
Until today, Barclays had been quiet about the speculation of large write-downs which had made investors anxious. However, following the announcement, the bank’s shares increased, gaining 1 pence in lunch-time trading to 534 pence. The stock has fallen 27% this year.
John Varley, chief executive, said the numbers are rigorous and reassuring. He added that income from commodities, equities and emerging markets had helped absorb the write-downs. For October, Barclays Capital, the securities unit where most exposure to the market turmoil lies, reported the best income levels ever of any fourth-quarter month.
Finally, Robert Diamond, president of Barclays, has guaranteed that there is no further risk of write-downs in residential mortgage-backed collateral debt obligations. October brought a second leg down in the market, and we said let’s take account now of what could come down this year. Mr Diamond concluded that this is clinical and conservative.
Visited 2270 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.