Barclays hit by £110m Tricolor loss
Barclays reported a 110 million pound loss from the failure of Tricolor, an American subprime auto finance company accused of fraudulent practices. The British bank posted 2.1 billion pounds in pre-tax profit for the third quarter, meeting analyst expectations despite the writedown. Chief executive C.S. Venkatakrishnan said the fraud revelation was unexpected but acknowledged the bank shares responsibility for the exposure.
The lender holds 20 billion pounds in private credit investments, representing 6 percent of total loans, with the most concentrated in the United States markets. Bank of England Governor Andrew Bailey warned about structural risks in the $ 3 trillion private credit sector following recent institutional collapses. Barclays announced a 500 million pound share buyback and raised its 2025 return target above 11 percent as stock prices climbed nearly 5 percent.
The bank increased reserves for motor finance compensation claims to 325 million pounds from 90 million as regulators propose an 11 billion pound consumer redress program. Barclays criticized the Financial Conduct Authority framework for calculating potential damages from undisclosed dealer commissions on vehicle loans between 2007 and 2023. The regulatory scheme could affect 14 million financing agreements across the British automotive industry.
