Barclays trader reportedly took a $19 million hit from Turkish bonds

A trader at Barclays PLC BCS, -2.51% reportedly suffered a loss of around 15 million pounds ($19 million) from trading Turkish corporate bonds in the last few days, a casualty of the market tumult caused by the lira’s swoon.

Tolga Kirbay, a senior credit trader at the British bank, took the hefty hit from trading Turkish corporate paper over three days since last Thursday as the lira plunged and borrowing costs rose, Bloomberg News reported, citing people familiar with the matter.

The Wall Street Journal, citing a person familiar with the situation, reported that Kirbay’s loss was balanced by hedges elsewhere in the credit business and that the bank hadn’t suffered any significant losses in its business overall.

A Barclays spokesman didn’t immediately respond to a request for comment.

Investors worry that Turkish firms will struggle to service dollar-denominated debt if the lira continues to weaken. Analysts at Oxford Economics estimate Turkish corporate debt denominated in foreign currencies amounts to more than 10% of the country’s GDP.

The lira USDTRY, -0.4309% is down more than 50% against the greenback this year.

As one of the largest banks in the United Kingdom, Barclays is unlikely to be nursing much pain from the trader’s losses but underlines the way investment banks may make bets in more risky corners of financial markets to bolster their earnings. The bank saw a 2% dip in fixed-income trading revenue in the last quarter, nonetheless it recorded net profits of a 468 billion pound in the first half of the year.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.