Barclays posts 33% fall in first-half profits
Barclays Bank has today revealed that pre-tax profits fell 33% in the first six months to the end of June following more write-downs.
Barclays made £2.75 billion, compared with £4.1 billion in the same period last year.
John Varley, chief executive of Barclays, described the results as disappointing and apologised to shareholders who have had to endure a lot.
Mr Varley warned that it will take a long time for the business volumes experienced prior to the credit crunch to be achieved again. The outlook remains difficult, he said.
However, the results did exceed many analysts’ expectations and the falls in profits were less severe than most of its rivals.
Last week, Lloyds TSB and HBOS revealed significant falls in profits due to rising levels of bad debt. Furthermore, Royal Bank of Scotland is expected to reveal the biggest loss in UK banking history after taking a hit of almost £6 billion as a result of the credit crisis.
Barclays said total bad debts for the first-half came in at £2.4 billion, which represented a 155% increase compared with the same period in 2007, as sub-prime mortgages and other credit-related investments continued to fall in value.
However, Barclays took advantage of the mortgage drought to build market share, gaining 26% of the mortgage market in the first six months, an increase of 6% compared with the same period last year.
Barclays, which is Britain’s third largest bank, has 11.5 million UK customer accounts, and 786,000 mortgage accounts.
It recently secured £4.5 billion from investors but from ordinary shareholders only took 19% of new shares.
In addition, earlier this week the bank further improved its balance sheet after it sold its life insurance unit to Swiss Re in a deal worth £753 million ($1.48 billion).
Shares in Barclays were up 14p to 383p in morning trading.
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