Barclays profit falls 15% to £7bn, despite value of home loans business rising – Mortgage Finance Gazette
The high street bank says UK mortgage balances lifted 2.6% to 162.2bn in the period compared to a year ago. Its overall loans and advances to customers fell 2% to £205.1bn, impacted by an £8.5bn slide in business banking balances.
The firm adds that new mortgage lending in 2022 fell 11% to £30.3bn over the period, which was “mainly driven by economic conditions that resulted in general mortgage market suppression, including higher mortgage payments as rates continued to rise and increased cost of living factors in line with inflation”.
The business says the average loan to value of its mortgage portfolio was 50% this year, compared to 51% a year ago.
The average loan to value of new mortgage lending was 68%, compared to 70% a year ago.
It announced it was setting aside £1.2bn in impairment charges to cope with potential customer defaults, which it says reflects “macroeconomic deterioration” over the past year.
This compares with £653m it released from its cash cushion in 2021 as conditions appeared to improve after pandemic restrictions were lifted.
Barclays adds that its £2.3bn acquisition of specialist lender Kensington Mortgages last June has gained regulatory approval, with the transaction now expected to complete in the first quarter of this year.
Barclays group chief executive C. S. Venkatakrishnan says: “We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”