Barclays Bank reports 2006 profits up 35 percent
by Elaine Frei
Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) has released its 2006 profits report, showing its pre-tax profits in the year to be at £7.14 billion, up 35 percent over 2005 and a new record for the company. It said that while bad debt was up 37 percent and its Barclaycard credit card division had a 40 percent decline in profits, its overall increase in profits was spurred by growth in its investment banking and fund management divisions.
Barclays chief executive, John Varley, called it “an excellent year”. Profits rose 55 percent in its investment banking division, while profits grew by 35 percent in its Barclays Global Investors fund management business. The bank’s High Street UK bamking division saw its pre-tax profits increase by 17 percent, at least partly because of performance in mortgages and savings accounts. Amid talk that free banking might soon become a thing of the past, Mr. Varley said that Barclays is not planning to implement any new charges to customers.
Barclays was the first major UK bank to report this year. The next banks to report are scheduled to be Alliance & Leicester (LSE: AL) on Wednesday and Lloyds TSB (LSE: LLOY) on Friday. It is expected that the UK’s top five banks combined managed around £38 billion in profits in 2006.
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