Barclays shares (LON:BARC) rallied on Wednesday after the UK bank posted a reduction in profit for the first quarter as it set aside $2.1bn for bad debt dues to COVID-19.

Shares in Barclays rose significantly above 100p for the first time since late March as Barclays share price rallied over 5% to 103p in early trade on Wednesday.

The UK bank reported statutory profit before tax of £0.9bn, down from £1.5bn in the same period a year ago. Profit before tax would have been £3bn should the bank not have had to set aside £2.1bn in provisions for bad loans.

Before the impact of the £2.1bn provision, Barclays £3bn profit represents a strong increase on last year and will stoke investor optimism Barclays were in good shape going into the crisis.

“An event like the COVID-19 pandemic makes everyone focus on what’s really important right now. For us, that means running the bank safely and soundly, helping our customers and clients through the difficulties they face, supporting the UK economy and the communities where we live and work, and taking care of our colleagues around the world,” said Jess Staley in a statement included in the update.

Jess Staley continued to outline the impact government schemes such as CBILs had on Barclay’s ability to make loans to UK businesses.

“We welcome the government and Bank of England’s business support programmes and have introduced additional measures to back UK companies ourselves. They are now having a real impact. As at 24 April 2020 we have facilitated significant commercial paper issuance though the Covid Corporate Financing Facility, lent £737m in Coronavirus Business Interruption Loans, approved over 238,000 mortgage and loan payment holidays, and over 6 million customers and clients are currently paying no personal overdraft or business banking charges. We have launched a community aid package; through which we are donating £100m to support those who are being hardest hit by COVID-19. We expect that all of these measures will help to limit the economic and social impact of the pandemic.”

The Barclays CEO highlighted the impact of COVID-19 on the bank’s earning which would have been £3bn if they were not to set aside £2.1bn in provisions for bad loans due to the COVID-19 crisis.

“The impact of COVID-19 came late in what was until that point a good quarter. Statutory profit before tax was £0.9bn and profit before tax excluding credit impairment charges was £3.0bn. We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic.”

“The strength of Barclays lies in our diversification by business, geography and currency, which allows us to remain resilient through the developing economic downturn.”

Touching on the letter from the Bank of England which instructed banks to cut their dividends, Staley provided a rough timeline on when the Barclay’s board would start to consider paying dividends.

“In response to a request from the Prudential Regulation Authority (PRA), we cancelled the full year 2019 dividend payment of 6 pence per ordinary share, and the Board will decide on future dividends and its capital returns policy at year-end 2020.”

“Despite all the challenges we face as a consequence of COVID-19, I am confident Barclays will emerge from this pandemic, well placed to continue to serve our customers and clients, the communities and economies in which we operate, and our shareholders.”

The Barclays share price was up 5.68% at 103.3p in the first hour of trading on Wednesday.