Private Credit Industry Shifts Focus to Managing Risks During Economic Instability

Recent industry updates reveal that private credit lenders are increasingly implementing tougher legal protections for borrowers, as worries about possible economic challenges intensify. With companies burdened by debt feeling greater strain, organizations such as

and are adjusting their risk management approaches, while subprime lenders like draw attention to the instability within credit markets.

Barclays announced a 24% increase in pre-tax earnings for the first half of 2025 compared to the previous year, reaching £5.2 billion, fueled by robust results from its UK operations and private banking arm. The bank’s net interest income (NII) climbed 12% to £3.1 billion in the second quarter of 2025, with steady income sources now making up 73% of total revenue—a crucial indicator of the bank’s ability to withstand market swings. Barclays’ CEO highlighted a renewed focus on UK-centric business, noting that its Private Bank & Wealth Management unit delivered a 31.9% return on tangible equity (RoTE), reinforcing confidence in meeting 2026 financial objectives.

At the same time, Deutsche Bank’s private banking segment recorded a 4% year-over-year rise in net revenue to €2.4 billion in the third quarter of 2025, driven by a 9% boost in net interest income to €1.6 billion. Assets under management reached €675 billion, reflecting €13 billion in net new assets and supportive market trends. CEO Christian Sewing credited the gains to the bank’s “Global Hausbank” strategy, which puts clients and shareholders at the center during uncertain times. Nevertheless, the bank also reported a 16% reduction in credit loss provisions, indicating a cautious but positive outlook amid ongoing economic unpredictability.

The move toward stricter lending standards extends beyond large institutions. Subprime auto lender

Corp, which serves customers with low credit scores, saw a 16.5% year-over-year drop in consumer loan units in the third quarter of 2025. Its share of the subprime auto loan market fell from 6.5% to 5.1%, as increased competition and affordability issues weighed on results. Although the company surpassed earnings-per-share (EPS) expectations by 4.15%, revenue lagged behind projections. CEO Ken Booth stressed the importance of maintaining healthy margins over expanding loan volume, stating, “We prefer to do less business at strong margins rather than pursue higher volume.”

This overall shift signals a greater emphasis on risk control as banks prepare for possible loan defaults. Barclays’ focus on reliable income and Deutsche Bank’s attention to private banking liquidity mirror a broader industry effort to strengthen capital reserves. For subprime lenders like Credit Acceptance, these trends highlight the increased risks faced by borrowers as lending standards tighten.

Experts point out that the heightened attention to debt portfolios is part of a broader reaction to macroeconomic challenges, such as inflation and regulatory oversight. As banks strive to balance expansion with prudent risk practices, their ability to manage in an environment of uncertain credit conditions will be put to the test in the months ahead.