Barclays report 15% rise in profits

07-05-2009

Barclays report 15% rise in profits
Barclays has reported a 15 per cent rise in profits for the first three months of 2009 today.

In an interim management statement, the bank revealed first quarter profits before tax of £1.37 billion.

However, profits from high street retail and commercial banking were down 45 per cent to £586 million.

Also the bank saw a 79 per cent rise in bad debts to £2.3 billion.

Investment banking profits rose 189 per cent to £1.05 billion – following last year's slump and the integration of Lehman Brothers division Barclays purchase when the institution collapsed.

In the UK, Barclays' high street income hit as the low interest rates hit margins – but higher income came from mortgage and loans, as the bank managed positive net lending for the quarter.

The bank has now pledged to increase lending to UK business and consumers this year by £11 billion.

Profits were hit by increased number of customers defaulting on loans.

John Varley, Barclays chief executive, said: "Our results for the quarter showed the continued benefit of diversification.

"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."

Shareholders were told dividends will start to be paid in the fourth quarter of 2009 with a final cash dividend for the year being declared and paid in the first quarter of 2010.

However, they were warned "in the light of the current economic and financial environment" dividends would be "conservative" and significantly lower than the 50 per cent of profits distributed in recent years.

At 09:25 BST the Barclays share price was up 2.60 per cent to 295.50p. A year ago it was over 450p.

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