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Barclays chief executive John Varley has denied the bank has not been honest with the true value of its assets and confirmed 2008 profits will be above expectations.

The bank's share price tumbled last week on investor concerns Barclays may be forced to write down many of its assets, as rival Royal Bank of Scotland has.

Although Barclays attempted to reassure shareholders by confirming pre-tax profit for the year will be above the market consensus of £5.3 billion, the bank's share price continued to fall.

Mr Varley explained the falls were due to a general loss of confidence in the sector.

"The sentiment in the banking system at the moment whether it is in the UK, the US or in Europe, is at a low point in the cycle and that started in June 2007," Mr Varley said.

"One can understand why for a bank investor there would be fear as to how a bank had performed during the fourth quarter."

Asked how Barclays could be making a profit when Royal Bank of Scotland has announced record losses, Mr Varley said: "Risk isn't generic and risk management isn't generic.

"I think you can see in performance of banks across the world in the course of the last two years very differentiated performance."

Some analysts have criticised Barclays for being very conservative in writing down their assets but Mr Varley said the bank has been working closely with the FSA to ensure all its figures are correct.