November 16, 2007

Barclays write off £1.3 Billion

The UK’s number one bank saw its shares fall after announcing that they would be writing off almost £1.3 billion of bad debt. This figure includes a massive £800 million loss that resulted from the now infamous US “Sub Prime” crisis in October, the other £500 million had accumulated over the third quarter of trading, and this was a seriously bad month.

Yet the figures for the sub prime market collapse in the States were actually less than anticipated, so in that respect the figures are some what better than the industry expected and by holding their hands and admitting to their mistakes this has probably strengthened the faith in the business and the management.

These figures may have a good effect on the financial services sector, if these figures were very bad and then other banks reported heavy losses too, this would have seriously damaged their reputations. But these figures even though they are enormous, may save the industries face when the other banks reports their figures.

Source [Funtionpix]