Barclays’ Irish unit slips into €118m net loss

The Irish unit of UK financial institution Barclays slipped into the red last year, a period when its balance sheet almost doubled as the lender transferred assets here related to its activities in the EU in the run-up to Brexit.

Accounts just filed for Barclays Bank Ireland Plc for the year to the end of December 2020 show that it recorded an after-tax loss of €118 million, compared with a profit of €19 million a year earlier. This was due to a higher impairment charge (€280m), losses incurred on its Italian mortgage portfolio and certain funding costs.

The Dublin-based entity had total assets at the end of 2020 of €134.9 billion, up almost €66 million year-on-year. The Brexit migrations included derivative assets of €10.8 billion and customer loan facilities of €5.3 billion.

Loan volumes reduced by €900 million to €12.1 billion, reflecting lower demand from customers due to the pandemic, together with repayments in the bank’s Italian mortgage portfolio.

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Customer deposits of €19.6 billion grew by €1.3 billion during the year and exceeded its loan volumes.

Its total income rose by €119 million to €847 million, largely reflecting the migration of activities to the Irish unit from other Barclays group entities.

Operating expenses increased by €83 million to €670 million, driven by a rise in staff costs and increased administrative expenses and regulatory levies. No dividend was paid during the year.

Employee numbers at year-end were 1,646, up from 1,563 in 2019. About 260 of these positions were based in Ireland. Directors remuneration amounted to €3.5 million during the year, up from €2.3 million in 2019. Ten directors are listed as having served during the year.

Capability

In a statement issued to The Irish Times, Barclays Bank Ireland said: “The significantly enhanced scale and capability of Barclays Bank Ireland has continued to have a positive impact on the levels of business.

“Our enhanced ability to deliver sophisticated full-service mandates to global businesses and major corporates based in Ireland and across Europe has been a key growth driver, particularly in key sectors such as pharma and technology.

“The ongoing growth of the private bank has also continued, following the successful transition of all European private clients from a London platform to a Dublin-based platform ahead of Brexit.

“The Covid-19 pandemic proved challenging for many of our clients during the period. However, we provided critical support through a range of actions such as enabling the raising of debt and equity financing in the capital markets, providing or facilitating lending and offering payment holidays.”

Legal entity

The Irish unit is the primary legal entity within the Barclays global group serving EU clients, and is no longer a reflection of business transacted in the Republic. Its branches in Germany, France, Italy, Portugal, Spain, Sweden and the Netherlands were migrated to the Irish entity in the final quarter of 2018 and the first quarter of the following year, according to the accounts.

Its activities comprise corporate and investment banking, consumer cards and payments, and an Italian mortgage portfolio that is being run down.