{"id":187,"date":"2007-11-15T12:18:35","date_gmt":"2007-11-15T12:18:35","guid":{"rendered":"http:\/\/www.the-finance-zone.co.uk\/uncategorized\/barclays-reveals-sub-prime-losses\/"},"modified":"2007-11-15T12:18:35","modified_gmt":"2007-11-15T12:18:35","slug":"barclays-reveals-sub-prime-losses","status":"publish","type":"post","link":"https:\/\/the-finance-zone.co.uk\/index.php\/2007\/11\/15\/barclays-reveals-sub-prime-losses\/","title":{"rendered":"Barclays reveals sub-prime losses"},"content":{"rendered":"
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Barclays has confirmed that it did not escape the woes from investments in risky US home loans, taking a hit of \u00c2\u00a3800m ($1.64bn) in October.<\/strong>Sub-prime write-downs at its Barclays Capital investment bank arm now total \u00c2\u00a31.3bn, taking into account a \u00c2\u00a3500m write-down in the third quarter.<\/p>\n

The write-down was less than feared, and the bank said Barclays Capital profits were higher than last year.<\/p>\n

Rumours had circulated that the bank was hiding big mortgage-backed losses. <\/p>\n

“Today’s extensive disclosure demonstrates the strength and resilience of our performance during the year and in particular during the turbulent month of October,” said Barclays chief executive John Varley.<\/p>\n

The bank also said Barclays Capital still had more than \u00c2\u00a35bn worth of exposure to investments in packages of debt, which includes exposure to US sub-prime mortgages.<\/p>\n

However, despite the problems the bank said it still managed to make a pre-tax profit of \u00c2\u00a31.9bn in the first 10 months of 2007 even after it wrote down the losses.<\/p>\n

Tougher times<\/strong><\/p>\n

“The scale of the losses are certainly not in line with the worst case scenario which some had been factoring in,” said Richard Hunter, head of UK equities at Hargreaves Lansdown.<\/p>\n

“Barclays Capital as a whole improved on its 2006 performance – quite an achievement given the wider global trading concerns,” he added.<\/p>\n

Shares in Barclays jumped almost 6% after the announcement, which was made two weeks before the bank was scheduled to give a trading update.<\/p>\n

In recent trading they were little changed, up 4.5 pence at 537.5p, after the FTSE 100 stock index fell.<\/p>\n

Barclays shares have taken a beating in recent weeks as rumours persisted that the bank may have to write down as much as $10bn of losses related to investments linked to the US sub-prime mortgage market.<\/p>\n

A combination of higher interest rates and a slowdown in house price growth has had a serious impact on the sub-prime market, which focuses on people with poor or non-existent credit histories.<\/p>\n

In recent months, the higher borrowing costs have made it harder for many borrowers on low incomes to meet their mortgage repayments, and repossessions have soared.<\/p>\n

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Barclays has confirmed that it did not escape the woes from investments in risky US home loans, taking a hit<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[9,48],"tags":[],"class_list":["post-187","post","type-post","status-publish","format-standard","hentry","category-companies","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=187"}],"version-history":[{"count":0,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/187\/revisions"}],"wp:attachment":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}