British bank Barclays boosted first-half profits by nearly a third with a big drop in bad debts, and strong lending and investment banking activities, it said yesterday.
The results are another sign of revival by the banking sector, severely hit during the economic crisis, since several banks have reported strong figures in the last few days.
Barclays said that net profit was £2.4 billion (€2.9 billion) in the six months to June, up 29 per cent from the figure for the first half of 2009.
Pre-tax earnings leapt 44 per cent to £3.9 billion. Investment banking unit Barclays Capital more than tripled this figure to £3.4 billion.
Bad debt charges plunged 32 per cent to £3.080 billion, while income rallied 25.5 per cent to £13.501.
The bank was also lifted by an £851 million pound credit gain related to improving debt positions. On an underlying basis, with those gains stripped out, pre-tax profits advanced 22 per cent to £3 billion.
“Against the backdrop of subdued economic and market activity and the sovereign debt storm of the second quarter, we have delivered good growth in income and profits during the first half of the year,” Barclays chief executive John Varley said in the results statement.
“At the same time as lending a further 18 billion pounds to UK households and businesses, we have kept the regulatory balance sheet under tight control.” His comments followed a recent call from the British government for the banking sector to use their first-half profits to boost lending to businesses that are struggling to obtain funds.
Barclays is the latest British bank to report surging profits, continuing a trend set by rivals HSBC, Lloyds Banking Group and Standard Chartered earlier this week. Royal Bank of Scotland unveils its latest figures today. Despite the bumper results, Barclays’ share price fell 2.63 per cent to 331.66 pence in morning deals on London’s FTSE 100 index of top shares, which rose 0.29 per cent at 5,401.66 points.
“In all, this is a robust performance given a difficult first half of the year,” said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.
“The reliance on the investment banking operation, where progress has slowed, continues to cast something of a shadow over the shares.”