(April 28): Barclays plc set aside £228 million in the first quarter in relation to the collapse of specialised lender MFS, according to a person familiar with the matter.
The bank said on Tuesday that its increased credit impairment charge of £823 million, up from £643 million a year ago, was “primarily driven by a single name charge of £228 million". That is related to Market Financial Solutions, the person said, asking not to be identified discussing matters related to firms.
The failure of MFS — which has caught out firms across Wall Street — is shaping up to be one of the largest and most complex corporate implosions in recent UK history, adding to already simmering concerns about blind spots in due diligence and regulation of private markets. Backers face potential losses that could total £1.3 billion.
The bank also set aside an additional £105 million for the cost of compensating customers who were previously mis-sold car loans. That brings the bank’s total provision in relation to that saga to £430 million as of March 31. Barclays confirmed it has decided not to challenge the FCA’s final rules even as it said it “strongly disagrees with aspects which require financial redress even where customers suffered no demonstrable financial harm".
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