Barclays Takes $2.7 Billion Mortgage Writedown

November 15, 2007 No Comments »

Barclays Group PLC announced today that it took a $2.7 billion write-down related to losses on securities linked to U.S. subprime mortgages.

The news came as a surprise to investors, who hadn’t expected a business update from Barclays until later this month.

It is believed that Barclays decided to reveal the hefty loss in their Barclays Capital Investment unit after rumors of a large loss began to spread, leading to widespread investor criticism.

The stock had also been losing ground after rumors floating around put a possible write-down at $10 billion, and claimed top brass would be kicked to the curb as well.

Investors were also pleased to hear that net income and profit before tax for the 10 months ended Oct. 31 beat the previous year’s record results as performance in Europe, Asia and the U.K. worked to offset problems related to the U.S. mortgage crisis.

The opinion from analysts regarding the near-term future of the bank and mortgage lender was skeptical after the surprise news release.

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