Barclays has said it has set aside £150m to cover the impact of “anticipated economic uncertainty in the UK” as it reported a slight fall in annual profits.
The disclosure in the bank’s financial results comes weeks before a possible no-deal Brexit and adds to warnings about the potential fall-out for the economy from other lenders.
Barclays said pre-tax profits for 2018 fell 1% to £3.49bn as it counted the cost of past misconduct including a £1.4bn settlement with US authorities over the sale of toxic mortgage assets in the run-up to the financial crisis.
Stripping out these litigation and conduct costs, earnings rose by 20% to £5.7bn.
Shares were 4% higher in early trading but turned flat on the day by the close.
Chief executive Jes Staley said: “2018 represented a very significant period for Barclays.
“In the course of the year, having resolved major legacy issues… we started to see the earnings potential of the bank.”
The results come as the bank faces sustained pressure from activist investor Edward Bramson for a shake-up.
Rival lender Royal Bank of Scotland said last October that it was taking a £100m charge related to a “more uncertain economic outlook” in the UK.
The provision made by Barclays reflects an expected impact of uncertainty on its UK credit card and corporate loans operations.
Barclays said 2018 profits for its ring-fenced UK consumer business were up by 12% to £1.96bn, though for the fourth quarter they were 14% lower at £390m compared to the same period a year ago.
The bank said it saw “continued momentum” in mortgage lending and customer deposits but saw profit margins on its loans squeezed – amid what other lenders have said is a tough competitive environment.
Profits at the lender’s international arm also rose, including a 26% rise in earnings for its corporate and investment bank to £2.59bn.
The bank disclosed that Mr Staley was paid £3.4m in 2018, down from £3.9m in 2017 after seeing £500,000 of previous bonuses clawed back following an investigation into his attempt to uncover a whistleblower.
(c) Sky News 2019: Barclays sets aside £150m to cover UK ‘economic uncertainty’