“The last six months have been among the most difficult in our history,” Santander executive president Ana Botín said in a statement.
Santander’s pre-tax profit fell 49% in the first half, compared to the same period a year earlier, due to a massive increase in provisions for bad debts to more than 7 billion euros. ($8.2 billion).
London-based Barclays is bracing for the worst, quadrupling its bad debt cover in the first half to £3.7bn ($4.8bn), from a year earlier, due to the anticipated impact of Covid-19. Its pre-tax profit fell 58% over the period.
The losses were offset by a 31% rise in profits at Barclays’ investment bank, which benefited from increased trading revenue in extremely volatile markets.
Barclays said it had provided around £22bn ($28.5bn) in government-backed loans to UK businesses and extended payment holidays to 600,000 retail customers.
“In a challenging environment, we grew our revenues and continued to reduce our costs, and we are on track to achieve all of our targets,” CEO Christian Sewing said in a statement.
Like Barclays, Deutsche has been buoyed by market turbulence. Investment banking revenue jumped 31% to nearly 5 billion euros ($5.9 billion) in the period, driven by trading in fixed income securities.
Deutsche Bank increased provisions for bad debts by 761 million euros ($894 million) in the second quarter, adding to the 506 million euros ($594 million) it had built up three months ago .
— Julia Horowitz contributed reporting.