[LONDON] Barclays' traders had a blockbuster second quarter, overshadowing the misery for retail and business customers in its home British market.

The London-based bank's securities division reported a 60 per cent gain in foreign-exchange, rates and credit trading revenue as the aftermath of the coronavirus pandemic whipsawed markets, tracking the average gain at US peers. The lender took a £1.6 billion (S$2.85 billion) charge to anticipate bad loans from the crisis, slightly higher than expected, bringing the total to £3.7 billion so far.

"Although we will remain well capitalised and ahead of our minimum requirements, we may experience stronger capital headwinds in the second half of the year," chief executive officer Jes Staley said in the bank's earnings statement on Wednesday.

Barclays is the first British bank to report quarterly earnings, and unlike its local rivals, benefits from a corporate and investment bank that capitalises on coronavirus-driven market volatility. As early as April, finance director Tushar Morzaria had signalled that the trading surge had already put second-quarter performance well ahead of its 2019 equivalent.

Mr Staley staked his tenure on the securities business, and has long argued that it provides a hedge during a time of crisis. Wall Street's five biggest investment banks had US$45 billion in revenue from trading and dealmaking units in the most recent quarter - those businesses' best quarter in modern history.

Barclays forecast that impairments in the second half would fall from the first-half level. Still, its credit card and payments unit booked a loss for the first six months of the year. The unit recently stopped taking new applicants for a co-branded credit card with Uber Technologies, one of its highest-profile cards in the US market.

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Barclays had previously indicated that quarterly impairments should run between £800 million and £1 billion per quarter this year. Analysts expected a £1.4 billion hit in the second quarter. In Europe, Banco Santander took a US$14.8 billion Covid-19 hit, the biggest among banks in the region.

BLOOMBERG