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Barclays pre-tax profits up 15% Barclays pre-tax profits up 15%
(about 2 hours later)
Barclays Bank has announced a sharp rise in profits in the first three months of this year despite the ongoing financial crisis. Barclays Bank has announced a sharp rise in profits in the first three months of the year despite a jump in bad debts during the financial crisis.
Profits before tax came in at £1.37bn ($2.07bn), up by 15% compared with the same period last year. Gross profits came in at £1.37bn ($2.07bn), up by 15% compared with a year earlier, as record income offset a 79% increase in impairment charges.
Total income almost doubled to a record £8.15bn because of strong performance at the group's investment banking arm. Separately, Lloyds Banking Group said it expected to make a loss in 2009 despite "good progress" made this year.
Separately, Lloyds Banking Group said it still expects to make a loss in 2009 despite "good progress" made this year. Its shares slid 9% as it also announced a "significant" rise in impairments.
Without quoting specific figures, the bank said it had delivered "good revenue growth in the first quarter of 2009." Without quoting specific figures, the bank said it had delivered "good revenue growth in the first quarter of 2009".
It added that 500,000 new current accounts had been opened during the period, and that it was on course to cut costs by £1.5bn a year by the end of 2011.It added that 500,000 new current accounts had been opened during the period, and that it was on course to cut costs by £1.5bn a year by the end of 2011.
But the quarter had seen a "significant" rise in impairments, Lloyds said in the statement that sent its shares down 10% in early trading, more than any other share in the FTSE 100. We generated strong income growth across most business lines John Varley, Barclays chief executive class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/87068/intraday.stm">Barclays share price class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/87114/intraday.stm">Lloyds Banking Group share price
We generated strong income growth across most business lines John Varley, chief executive, Barclays But the bank said that "corporate impairment levels are rising significantly, reflecting the continuing deterioration in the macro-economic environment".
The overall effect of the impairments will, however be reduced significantly by the bank's participation in the government's Asset Protection Scheme, which insures banks' riskiest assets against further losses, Lloyds added. The overall effect of the impairments will, however, be reduced significantly by the bank's participation in the government's Asset Protection Scheme, which insures banks' riskiest assets against further losses, Lloyds added.
"Our intended participation will substantially reduce the risk profile of the group's balance sheet and significantly strengthen our capital position," Lloyds chief executive Eric Daniels said. "Our intended participation will substantially reduce the risk profile of the group's balance sheet and significantly strengthen our capital position," said Lloyds chief executive Eric Daniels.
Strong resultsStrong results
Unlike Lloyds and RBS, Barclays has shunned government help, instead choosing to raise money privately.Unlike Lloyds and RBS, Barclays has shunned government help, instead choosing to raise money privately.
Total income at Barclays during the first quarter of the year almost doubled to a record £8.15bn because of strong performance at the group's investment banking arm.
"Income increased by 42% driven by very strong performance at Barclays Capital and by most of the international businesses within global retail and commercial banking," the bank said."Income increased by 42% driven by very strong performance at Barclays Capital and by most of the international businesses within global retail and commercial banking," the bank said.
However, income from UK retail banking fell slightly.However, income from UK retail banking fell slightly.
The strong results were achieved despite losses from write downs of £2.61bn and increased costs related to the bank's acquisition of parts of US bank Lehman Brothers last year. The strong results were achieved despite losses from write-downs of £2.61bn and increased costs related to the bank's acquisition of parts of US bank Lehman Brothers last year.
"We suspect this is by far and away the best quarter Barclays has ever had [excluding write downs]," said Jonathan Pierce at Credit Suisse."We suspect this is by far and away the best quarter Barclays has ever had [excluding write downs]," said Jonathan Pierce at Credit Suisse.
Barclays boss John Varley said the bank's performance reflected "the continued benefit of diversification", including the purchase of Lehman.Barclays boss John Varley said the bank's performance reflected "the continued benefit of diversification", including the purchase of Lehman.
"We generated strong income growth across most business lines driven by the investments we have made in expanding our international network," he said."We generated strong income growth across most business lines driven by the investments we have made in expanding our international network," he said.
Private cash
The bank recently agreed to sell its iShares fund management business to CVC Capital Partners to raise £3bn ($4.5bn).The bank recently agreed to sell its iShares fund management business to CVC Capital Partners to raise £3bn ($4.5bn).
While other High Street banks have accepted government money to help them through the credit crunch, Barclays has chosen instead to raise finance privately. And last year, Barclays raised £7bn from investors in the Middle East in order to avoid taking government money.
Last year, the bank raised £7bn from investors in the Middle East.
The bank has also not taken part in the government's insurance scheme for toxic assets.The bank has also not taken part in the government's insurance scheme for toxic assets.
The Asset Protection Scheme uses government money to insure banks' riskiest assets against further losses.The Asset Protection Scheme uses government money to insure banks' riskiest assets against further losses.
Barclays reported profits before tax of £6.08bn for 2008.Barclays reported profits before tax of £6.08bn for 2008.