Barclays Public Limited Company (PLC) aims to recruit more than 1,000 people in the next few weeks to help clients manage their money through the impending slump, according to Chief Executive Officer C.S. Venkatakrishnan.
The British bank follows similar steps by HSBC Holdings plc and Virgin Money UK plc, as consumers grapple with the constant price rise in four decades coupled with hefty mortgage costs and energy bills along with the prospect of recession.
Venkatakrishnan said in a conference call with investors on Wednesday that UK credit card and expenditure statistics do not reflect rising concern, despite indicators of weakening consumer confidence in September. He stated that mortgage borrowers are making some overpayments to reduce their remaining debt. The company currently has 8,000 employees accessible to speak with UK consumers about their money.
“We aim to hire more than 1,000 more people in the coming weeks to improve that capacity,” he said after the bank’s mixed third-quarter earnings. About 1 per cent of the bank’s customers are in what it calls financial assistance, which Venkatakrishnan said was a “fairly low number.”
According to a bank representative, HSBC has contacted around 5.5 million clients to notify them of its assistance capabilities. In an emailed reply, HSBC stated, “We can confirm that we are now in the process of adding capacity to our financial assistance team.” The bank is considering whether to strengthen its forbearance mechanisms and has stated that more measures may be deployed in the coming weeks.
Virgin Money anticipated that consumers would want more assistance and has been hiring additional employees, with the company anticipating this trend to continue, according to a spokeswoman.
While banks profit more when interest rates increase, profits are jeopardised when consumers and business clients fail to repay loans in a slowing economy. Lenders have been warning for several quarters that the economy is about to deteriorate and have put aside hundreds of millions of pounds for potentially problematic loans.
In October, consumer confidence was at historic lows, posing a problem for firms already suffering from falling demand. GfK’s mood index rose 2 points to minus 47 in October, close to the lowest level since records began in 1974.