Tags: EU | Britain | Barclays

Barclays' Profit Rise 29 Percent on Fewer Bad Loans

Friday, 30 Apr 2010 02:56 PM


British bank Barclays PLC reported Friday that profit rose 29 percent in the first quarter due to fewer bad loans, but its share price slumped as a drop in investment banking income alarmed investors.

Barclays' net profit of 1.07 billion pounds ($1.65 billion) compared with 826 million pounds in the same period a year earlier. Revenue rose 4 percent to 8.07 billion pounds, the bank said in an interim management statement.

Impairment charges for bad loans were down 35 percent from a year earlier at 1.51 billion pounds, a 19 percent decline from the fourth quarter.

"The improvement that we have seen in impairment reflects the signs of economic recovery now evident in many of the markets in which we operate," Chief Executive John Varley said.

Pretax profit at Barclays Capital, the investment banking unit, soared 62 percent higher but markets were worried by a sharp fall in revenue, to 3.85 billion pounds from 5.2 billion pounds a year earlier. Income from the fixed income, currencies and commodities (FICC) segment was also below last year's level at 2.6 billion pounds, the company said.

Barclays shares closed down 6.4 percent to 338.25 pence on the London Stock Exchange.

Bruce Packard, financial analyst at Seymour Pierce, said the report raised questions about continued growth at Barclays Capital.

"FICC bankers ... have worked hard to perpetuate the scientific nonsense of everlasting, compounding growth," Packard said in a research note. "Behind the sterile equations of modern finance is the stench of medieval alchemy, lead into gold, debt into wealth."

Analysts said the net profit figure and the 1 pence dividend were in line with expectations, but investors were likely to be disappointed by lower income at Barclays Capital as well as higher operating costs and an increase in risk-weighted assets from the fourth quarter.

Ian Gordon, analyst at BNP Exane Paribas, said investment banking income was "surprisingly weak, especially in the context of BarCap's reported improving market shares."

"The substantial kick given to operations following the move to near zero interest rates in early 2009 appears to have mitigated, whilst European operations are still finding life challenging," said Keith Bowman at Hargreaves Lansdown Stockbrokers.

"Furthermore, Barclaycard has been hit by changes in U.S. credit card regulations, while overall operating expenses have risen. Finally, as with the wider sector, the massive question of regulation is still very much up in the air."

Pretax profit from Barclaycard fell 34 percent to 118 million pounds. The bank blamed that partly on new U.S. regulations, but also reported that impairment charges had increased.

Barclays U.K. retail banking operation posted a 20 percent gain in pretax profit, including a gain from the acquisition of Standard Life Bank. But Global retail banking pretax profit was down 6 percent.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Sen. Ayotte: Trading Terrorists for Citizens Sets Bad Precedent

Monday, 26 Jan 2015 22:23 PM

Sen. Kelly Ayotte told Fox News she is glad Rep. Duncan Hunter is asking questions about the timing of the release of an . . .

CIA Officer Convicted of Leaking Secrets to NYT's James Risen

Monday, 26 Jan 2015 16:01 PM

A former CIA officer was convicted Monday of leaking details of a covert mission to derail Iran's nuclear program in a c . . .

Critics: Fawning Over Deceased Saudi King Whitewashes Reality

Monday, 26 Jan 2015 21:38 PM

Joint Chiefs of Staff Chairman Martin Dempsey's decision to establish a "research and essay competition" in honor of the . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved