In today's episode Adrian Lawrence our resident financial professional talks about how Barclays bank is putting aside £2.1billion as a provision for bad debts. The UK and US economies have been badly impacted by the pandemic and the bank now expects a proportion of its lending during that time never to be repaid, as a result it is making a provision in its accounts to cover its expected losses.
Provision can sometimes be overly cautious and if that is the case then some of this provision will be released as a future profit, but there is also a good chance that the provision will be needed. Once Government support is withdrawn then businesses in the UK and USA will face a day of reckoning as businesses and individuals become insolvent.
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