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Rise in Barclays' pre-tax profits
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Banking giant Barclays has posted a 15% rise in pre-tax profits but part-nationalised rival Lloyds Banking Group said it is still on course for losses this year.
Barclays posted a surplus of £1.37 billion in the first three months of 2009 - largely thanks to its Barclays Capital investment banking division - although bad debts jumped 79% to £2.3 billion.
HBOS owner Lloyds Banking Group said it had seen a "significant" rise in impairments due to the impact of recession on its loan book.
Corporate bad debts are expected to be 50% higher than last year.
Barclays, which has avoided Government support so far, said BarCap's profits had soared after it bought the investment banking business of collapsed Lehman Brothers last year.
This pushed the division's pre-tax profits to £907 million - 361% ahead of the same period last year.
The boost came despite the rise in bad debt charges due to credit market write-downs and the deteriorating economic climate.
Profits also fell "significantly" at its UK retail banking business as losses on consumer loans and overdrafts increased while record low interest rates squeezed margins.
Chief executive John Varley said the bank had reaped the benefit of its diverse businesses.
"We generated strong income growth across most business lines driven by the investments we have made in expanding our international network and in buying Lehman. This, together with good cost control, has enabled us to shield the anticipated increase in impairment and absorb further credit market writedowns on legacy assets," he said.
Reader views (1)
Barclays is the best run of the UK banks and has consistently out performed the banking sector.
I await the venal sand uninformed comments about banks and their profits with baited breath.
- Dave Davies, Basingstoke, 07/05/2009 09:48
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