Barclays Reports Q1 Profit Rise Amid £228m Hit; UK Officials Testify in Mandelson Vetting Inquiry

chief executive CS Venkatakrishnan stated that the bank is constraining lending to certain structured finance counterparties with vulnerable business models, emphasizing the need for strong financial controls at borrowers. He noted that incidents like the MFS collapse, along with prior losses from US sub-prime auto lender Tricolor and auto parts company First Brands, highlight increasing fraud risks, particularly in weaker economic cycles.

" — CS Venkatakrishnan (The Guardian). Chief financial officer Anna Cross said businesses remain in good shape with no credit deterioration observed, and consumers are prioritizing essential spending and repaying credit card debt in response to the Middle East conflict.

Venkatakrishnan warned that prolonged higher oil prices from the war could impact the economy, though no credit weakness has appeared yet, and noted a recent uptick in UK inflation.

The losses from MFS, Tricolor, and First Brands, all involving allegations of fraud or mismanagement, have prompted scrutiny of lending standards in the $2tn private credit industry. Bank of England governor Andrew Bailey described the sector as a relatively opaque world and stressed the need for transparency and stress testing to maintain faith in the financial system.

Barclays provided banking services to MFS and reported a £110m loss from Tricolor last year. The bank defended its trading performance as middle of the pack compared to Wall Street banks, attributing differences to its lack of a commodities business, which benefited US banks amid the Middle East conflict.

Financials analyst Will Howlett at Quilter Cheviot described Barclays' first quarter as solid but partially obscured by one-off issues.

Barton said he was not consulted on the decision and was presented with a diligence document, adding that the prime minister was informed of the risks and had accepted them. He described No 10 as uninterested in the vetting process, focusing instead on practical steps for Mandelson to arrive in Washington on time. >"A decision had been taken. It was a political decision."

expressed concerns about Mandelson's known links to convicted sex offender Jeffrey Epstein, describing Epstein as a toxic hot potato in US politics, including during the election campaign. He said there was no space to raise these concerns before the appointment.

The testimony contradicted Starmer's claim that it is normal for political appointments to have vetting after announcement; Barton stated vetting normally precedes announcement. He admitted it would have been a crisis if Mandelson failed vetting after the announcement, and confirmed there was no contingency plan.

Barton also said he was asked to withhold information from the foreign secretary, describing it as not unheard of but not standard. This follows similar testimony from Sir Olly Robbins last week about withholding information from David Lammy regarding a job request for Matthew Doyle.

The hearing precedes a crunch vote on whether Starmer should face an inquiry into claims he misled parliament over the Mandelson saga. Starmer sacked Mandelson in September 2025 over his Epstein links. Barton played down claims that McSweeney told the Foreign Office to just approve the appointment, stating he never received a direct call from McSweeney.