Second major bank takes financial hit from Carillion collapse

Barclays is the latest bank to have revealed a financial hit as the result of the collapse of Wolverhampton-based construction and facilities management group, Carillion.

Announcing its full year results, the bank said a sizeable portion of a £127m charge on its latest quarterly accounts related to collapse.

The revelation comes days after HSBC revealed a £500m hit to its profits as a result of exposure to Carillion and Steinhoff, the South African parent of Black Country-based retailer, Poundland.

Barclays, along with HSBC, was one of the five key lenders to Carillion and had voted in favour of bailing out the business shortly before its collapse on January 15.

The Barclays announcement came on the day partners at KPMG gave evidence at a Parliamentary hearing, defending their role in the signing off of the Carillion accounts just months prior to the collapse.

The liquidation of the firm last month has now accounted for the loss of more than 1,000 jobs and more are likely to follow.

However, there was better news for some of the company’s former employees with the announcement that Amey had today taken over a number of rail contracts previously run by Carillion, including IP Central Panel work for East Coast mainline and Midland Main Line, Crossrail (Old Oak to Paddington Area), Plain Line Track Renewals and the North West Electrification Programme.

The deal is thought to safeguard around 700 jobs, both directly and in the wider supply chain.

Amey said the deal expanded its presence in the rail sector, where it is already one of the leading suppliers to Network Rail.

The new contracts will now see Amey complete delivery of critical projects, including work on Crossrail’s Old Oak to Paddington section, electrifying the strategic railway network around Manchester and the increasing of capacity on the Midland Mainline.

It said it was now focused on ensuring a smooth transition of the workforce to Amey.

Matthew Steele, commercial director, Network Rail, said: “We are very grateful for the commitment shown by Carillion employees who are continuing to deliver these critical projects for the benefit of passengers.

“After a period of uncertainty, this is a positive development and provides stability for many rail projects being undertaken by Carillion, whilst retaining skills in the rail industry and our wider supply chain.

“We look forward to working with Amey to enable a smooth transition and ensure ongoing safe working on our sites.”

Andy Milner, chief executive, Amey, said: “We are excited to be taking on these rail contracts that form a key part of Network Rail’s vision for the country’s modernised rail network.

“With a deep understanding of these operations, we are perfectly placed to become the new contractor for these projects. This will mean that our rail business will grow significantly, as we support Network Rail to deliver critical milestones.

“We look forward to welcoming the employees to our business, and further strengthening our relationship with Network Rail.”