Barclays Leadership Cautions on Decrease in Business Deals and Loans Amid Trump's Tariff Impositions
Trade wars are putting bankers on edge, particularly at Barclays. Despite posting a higher-than-expected surge in profits, the bank is bracing for a slowdown in lending and dealmaking due to Donald Trump's tariffs fiasco.
This comes as a result of the chaotic trade policies wreaking havoc on global markets, leading to an increase in frenetic trading activity. However, this frenzy only partially compensates for the negative impact on Barclays Investment Bank as deal-making is delayed.
The bank's profits soared by 19% to £2.7 billion in Q1, surpassing analysts' expectations of £2.5 billion. Venkatakrishnan, the bank's CEO (known as Venkat), hinted at more storms ahead. Trading revenues could continue to skyrocket due to volatility caused by the uncertainty, but deal-making and financing may take a backseat until some clarity emerges.
Barclays has set aside a considerable sum to cover potential loan defaults amid the trade war. Provisioning increased to £643 million, with a significant chunk (£74 million) attributed to heightened US macroeconomic uncertainty.
Mustering the courage a day before, HSBC stated that Trump's tariffs are leading to a significant reconfiguration of the global economy. As banks grapple with these circumstances, they must be cautious to make decisive moves while waiting for the dust to settle.
- The surge in profits at Barclays, despite the trade war concerns, isn't enough to preventexpectations of a slowdown in lending and dealmaking due to Trump's tariffs.
- Venkatakrishnan, the CEO of Barclays, anticipates more turbulence ahead, with trading revenues possibly increasing due tovolatility resulting from uncertainty, but deal-making and financing may face a downturn.
- To counter potential loan defaults caused by the trade war, Barclays has allocated asizeable amount of money, with a portion of it allocated to cover heightened US macroeconomic uncertainty.
- Following Barclays, HSBC has also expressed concerns about Trump's tariffs, stating they lead toaremarkable reconfiguration of the global economy.
- With the ongoing turmoil in global finance, politics, and general-news sectors due to the trade wars, banks must be prudent in their decisions, awaiting the settlement of the ongoing dust.
