Barclays mortgage subsidiary makes £5bn balance sheet whoopsie
Don’t you just hate it when you mix up millions with billions?
No one is immune from such mistakes. Including, as it turns out, one of Britain’s biggest banks.
A subsidiary of Barclays, the Kensington Mortgage Company, last week published its accounts.
While revenue was up slightly to £83.4m, pre-tax profit fell by 90 per cent, in large part because of “a write-down of technology-related work in progress that was no longer considered viable”.
Quite how bad was this failed technology write-down? I went and checked the footnotes, in particular a section called “assets under development” which it describes as “software and hardware projects which are in the build phase.”
“Additions of assets under development previously shown as £5,166m has been restated as £3,730m”.
Hold on a second, I thought – how has a £83m turnover mortgage business built software worth £5.2bn (which it then restated as £3.7bn) in a year? Could Kensington Mortgage Company have just spawned Britain’s most valuable tech startup?
Turns out it should in fact have referred to millions, not billions. Mercifully, the footnote error did not make its way into the headline balance sheet numbers.
Kensington Mortgage Company declined to comment.
A brave spokesperson denied the figures were erroneous, instead suggesting that the use of a comma is a “common approach” to designate a decimal point. That might be persuasive, had a comma been used in this way anywhere else in the report, or indeed by any financial report produced by Barclays UK and its subsidiaries – as far as I’ve been able to find, anyway. But perhaps I’m being uncharitable.