Business

Monday August 3, 2009

World's 3rd largest bank, Barclays, reported Monday 1H net profit up 10%


LONDON: Barclays PLC, the world's third-largest bank in terms of assets, said Monday that profit in the first half rose by 10 percent, lower than analysts' forecasts, and pretax profit from Barclays Capital doubled.

Net profit for the six months ending June 30 was 1.888 billion pounds ($3.16 billion), compared to 1.718 billion pounds in the previous year.

Impairment charges on loans and advances increased 73 percent to 3.9 billion pounds. Barclays said a third of the increase was due to currency movements and methodology revisions, with the remainder attributed to the recession.

Impairment charges on retail loans doubled to 1.98 billion pounds, while gross lending and advances were slightly lower at 200.55 billion pounds compared to 201.59 billion pounds at the end of last year.

Revenue net of insurance claims was up 37 percent to a record 16.25 billion pounds. Pretax profit from Barclays Capital increased 100 percent to 1.05 billion pounds, boosted by the acquisition of Lehman Brothers' business in North America.

The gain, however, was offset by a charge of 893 million pounds relating to own credit on structured notes.

The bank said the second half of the year would be challenging, with impairment trends continuing in line with the first half but with reduced credit market losses.

"The investments we have made, particularly in our international businesses, are driving very strong income performance and allowing us to absorb the consequences of the economic downturn," Chief Executive John Varley said.

Barclays has expanded operations in Pakistan, India, Indonesia and Africa. "Our capital base is stronger and we have significantly reduced leverage.

"Our goal for 2009 is very clear: we seek to deliver another year of solid profitability. Our first half performance is a good start to this."

Barclays chose to raise additional capital from Middle Eastern investors rather than participate in government bailouts, and it has said it doesn't expect to participate in the government's asset protection scheme to insure against bad loans.

On the Net:
http://group.barclays.com

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