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| Version 1 | Version 2 |
|---|---|
| Barclays reveals sub-prime losses | Barclays reveals sub-prime losses |
| (30 minutes later) | |
| Barclays has confirmed that it did not escape the woes from investments in risky US home loans, taking a hit of £800m ($1.64m) in October. | Barclays has confirmed that it did not escape the woes from investments in risky US home loans, taking a hit of £800m ($1.64m) in October. |
| Sub-prime losses at its Barclays Capital investment bank arm now total £1.3bn, taking into account a £500m write down in the third quarter. | Sub-prime losses at its Barclays Capital investment bank arm now total £1.3bn, taking into account a £500m write down in the third quarter. |
| The write down was less than feared, and the bank said Barclays Capital profits were higher than last year. | The write down was less than feared, and the bank said Barclays Capital profits were higher than last year. |
| Rumours had circulated that the bank was hiding big mortgage-backed losses. | |
| "Today's extensive disclosure demonstrates the strength and resilience of our performance during the year and in particular during the turbulent month of October," said Barclays chief executive John Varley. | "Today's extensive disclosure demonstrates the strength and resilience of our performance during the year and in particular during the turbulent month of October," said Barclays chief executive John Varley. |
| However, the bank also said Barclays Capital still had exposure to investments in packages of debt, which includes exposure to US sub-prime mortgages. | However, the bank also said Barclays Capital still had exposure to investments in packages of debt, which includes exposure to US sub-prime mortgages. |
| Shares in Barclays jumped 31.5p, almost 6%, to 564.5p in early trade. | |
| Sub-prime exposure | |
| Barclays shares have taken a beating in recent weeks rumours persisted that the bank could have a black hole of as much as £10bn as a result of huge exposure to sub-prime US mortgages, which have collapsed over the summer. | Barclays shares have taken a beating in recent weeks rumours persisted that the bank could have a black hole of as much as £10bn as a result of huge exposure to sub-prime US mortgages, which have collapsed over the summer. |
| The meltdown occurred as a result of a combination of higher interest rates and a slowdown in house price growth, which hit the ability of low income home buyers to meet their mortgage repayments. | |
| Subsequently, it emerged that this high-growth market over the past few years was one of the key factors behind the profitability of global banks. | |
| UBS, HSBC, Merrill Lynch and Citigroup are some of the banking giants that have recently disclosed billions of dollars in losses after being caught out by the sub-prime fallout. | |
| Both Charles Prince at Citigroup and Merrill Lynch's Stan O' Neal were forced to step down after the banks' admitted far-reaching problems as a result of heavy investments in mortgage-related securities. | |
| In the UK, Royal Bank of Scotland is scheduled to deliver a trading statement on 6 December, which will be closely watched for bad news. |