Barclaycard, the card-issuing unit of Barclays PLC, on Aug. 2 reported a £76 million (US$121.7 million) loss for the six months ended June 30, citing £600 million it set aside as a nonrecurring expense for customers reclaiming costs incurred for mis-sold payment-protection insurance. The unit of the London-based bank earned a £317 million profit during the same period last year.
The provision for the payment-protection insurance redress stems from the outcome of a judicial review of the controversial product offering, Barclays noted in its earnings report.
Total income for Barclaycard was £1.97 billion, up 0.5% from £1.96 billion. United Kingdom income totaled £1.25 billion, up 6.8% from £1.17 billion; international income fell 7.8%, to £723 million from £784 million).
“Profits in the U.S. and [South Africa unit Absa Group Ltd.] each grew to over £100 million, largely as a result of reduced impairment,” Chris Lucas, Barclays group finance director, told analysts during an Aug. 2 conference call to discuss earnings.
The Egg consumer card assets and MBNA corporate card portfolio Barclaycard acquired during the period “delivered immediate profit contributions,” the issuer noted in the earnings report. Barclays acquired the MBNA portfolio in April (
Net interest income remained flat at £1.37 billion, as did net fee and commission income at £571 million.
Barclaycard customers in the UK at the end of June totaled 12 million, up 8.1% from 11.1 million a year earlier. Customers outside the UK totaled 10.2 million, down 2.9% from 10.5 million.
Average outstandings on UK cards during the six-month period were £12 billion, up 9.1% from £11 billion a year earlier. Average outstandings on international cards totaled £9.2 billion, down 6.1% from £9.8 billion.
Retailer relationships at the end of June totaled 90,000, up 5.9% from 85,000 a year earlier.
