Barclays reported pre-tax profits of £2.1 billion for the third quarter, down seven per cent year on year, as the bank booked a £110 million impairment linked to the bankruptcy of US subprime auto lender Tricolor and increased its provision for UK motor finance redress.

The lender disclosed £325 million in total provisions for the Financial Conduct Authority’s proposed compensation scheme covering mis-sold car finance commissions, up from £90 million earlier this year. Barclays said the higher charge “reflects the increased likelihood of a higher number of motor finance cases falling within the scope” of the plan, while arguing the proposals “do not accurately address actual loss (if any) suffered by customers and do not achieve a proportionate or appropriate outcome,” according to reporting in This is Money.

Investment bank profit before tax was £925 million, up four per cent but below analyst expectations of £1 billion, the Financial Times noted. Barclays also announced a £500 million share buyback and slightly increased guidance, with shares rising in afternoon trading.

Chief executive officer C. S. Venkatakrishnan said the Tricolor exposure was not unexpected but “the surprise was the fraud,” adding “fraud is no excuse for us.” He emphasised Barclays’ risk discipline: “We take our credit risk management very seriously at all points in the cycle, and credit lending has to be prepared for all outcomes, including fraud.” He said Barclays had declined approaches to lend to First Brands because “our credit analysts didn’t think that they saw adequate support for the financial projections they were making.”

The Telegraph reported that the US Department of Justice has launched an investigation into alleged wrongdoing at Tricolor, while broader questions about private credit’s resilience continue to surface. Bank of England governor Andrew Bailey warned that “alarm bells” were starting to ring over private credit and said it was a “very open question” whether recent failures point to “something more fundamental” in private markets. Barclays said its private credit exposure is about £20 billion, roughly 70 per cent in the US, and insisted it “run[s] a very risk-controlled shop” lending to portfolios built by experienced managers.

Barclays withdrew from UK motor finance in 2019 and said the £325 million provision was “not a significant financial issue” for the group. Venkatakrishnan added the bank will “likely be monitoring our portfolios more carefully,” and reiterated that it had “no exposure to First Brands.”

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