Barclays pays out over $1bn to investorsEuropost
The UK Baclays announced it would give out more than one billion dollars to investors following a strong rebound in its financial results. The earmarked sum will be disbursed in the form of dividents and stocks buybacks, Reuters elaborated. The investment bank easily beat all forecasts related to its performance in the first half of 2021.
It benefited from high investment banking fees and the release of cash set aside to cover bad loan charges. Baclays reported a near-quadrupling in first-half profits, said it would pay an interim dividend of 2 pence per share, equivalent to around 340 million pounds in total, after the Bank of England in July scrapped payout curbs.
Barclays will also initiate a 500m pounds worth of its own shares, as it forecast bad loan charges would remain below historical levels due to the improved economic outlook and low default rates on unsecured lending. The bank also said it was able to release credit provisions due to the improved economic outlook since the start of the year, with the UK economy forecast to reach pre-pandemic levels mid next year in its core scenario.
The bank also factored a severe downside scenario into its forecasts in case vaccine supply was disrupted and new variants were resistant to vaccines. The bank reported profit before tax of 5 billion pounds for the six months to June 30, well above the consensus forecast of 4.1 billion pounds from analysts polled by the bank and up from 1.3 billion a year ago. The results were boosted by the bank releasing 742 million pounds in cash set aside for bad debt charges that have yet to materialise, as government support measures prop up the economy.