Barclays boss warns of slowdown in dealmaking and lending due to Trump's tariffs

Barclays cautioned about a deceleration in transactional activity and credit extension due to the ambiguity triggered by Donald Trump’s tariffs, despite reporting profits exceeding forecasts.

The financial institution experienced a surge in trading due to the US President’s erratic commerce policies, which caused global market turmoil.

This more than neutralized the effect of deferred dealmaking in Barclays Investment Bank, enabling the bank to declare a 19 per cent rise in earnings to £2.7 billion for the first quarter. Industry experts had projected earnings of £2.5 billion.

Profit Forecast and Sector Performance

Moreover, Barclays enhanced the profit outlook for its UK division, citing robust performance from its home loan and credit card services. Barclays chief executive officer CS Venkatakrishnan — known as Venkat in business circles — indicated potential future challenges.

Market Volatility and Economic Uncertainty

He stated that the bank’s trading division could continue to benefit from market fluctuations.

‘It is only natural, amid such uncertainty, to temporarily halt and reassess significant decisions regarding financing requirements and mergers and acquisitions to gain clarity,’ Venkat explained.

‘I anticipate that until clarity is achieved, individuals will persist in evaluating their environment with caution.’

Barclays allocated additional funds to cover the risk of loan delinquencies amidst the trade dispute.

Provisions increased to £643 million from £513 million the previous year, chiefly influenced by £74 million attributed to ‘elevated US macroeconomic uncertainty’.

Competitor Outlook and Global Economic Shifts

Ahead of Barclays’ announcement, competitor HSBC disclosed that President Trump’s tariffs were instigating a ‘global economy reconfiguration’.