sexta-feira, 30 de abril de 2010

Barclays first quarter profits up 47 percent to £1.8bn

By Sharlene Goff, FT.com

London, England (FT) -- Barclays played down its exposure to the debt crisis spreading across Europe on Friday as it reported a 47 percent rise in pre-tax profits for the first three months of the year.


The bank's performance was driven by strong results at Barclays Capital, the bank's investment banking arm, which saw pre-tax profits rise from £907m to £1.47bn ($2.25bn) in the first quarter. This division accounted for 80 per cent of the bank's total profits.
But its shares fell 4.6 per cent to 344.5p - making it the biggest single faller on the FTSE 100 on Friday - as traders expressed disappointment with the results.
"Investors have got used to strong numbers from investment banks, and Lloyds had raised hopes of an improvement in retail as well," said David Morrison, strategist at GFT.
"So Barclays has disappointed on this count and is being punished by traders as a result".
Barclays did, however, benefit from a sharp fall in the loan impairments rate. Impairments across the bank were £1.5bn ($2.25bn) in the three-month period, down 19 per cent on the previous quarter and 35 per cent lower than in the same period of 2009.
John Varley, chief executive, said: "I am pleased with the strong growth in profits which we have delivered this quarter. Diversification of our business and risk, and good underlying performance, have combined to produce this result. 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".
Total pre-tax profit jumped to £1.8bn ($2.7bn) compared with £1.2bn ($1.8bn) in the same quarter last year. Excluding charges on its own credit and £100m ($150m) in gains on acquisitions and disposals, underlying pre-tax profit increased 90 percent.
The performance should go some way to easing investors' concerns about the high levels of executive pay at the bank's shareholder meeting taking place on Friday.
Barclays said that about 38 percent of the income at BarCap -- amounting to about £1.4bn ($2.1bn) -- would be set aside for staff pay in the first quarter.
Robert Le Blanc, group financial risk director at the bank said that recent estimates of Barclays' exposure to Greece, Spain and Portugal, the countries most affected by the sovereign debt crisis, had been exaggerated.
One analyst had calculated that Barclays could have up to £40bn ($60bn) of exposure to these countries.
Mr Le Blanc said Barclays' total direct exposure -- through a "small operating presence" and a small sovereign debt position -- amounted to about £200m ($300m).
With regards to elsewhere in Europe, he said: "We have a larger presence in western Europe through our retail and wholesale bank. That doesn't imply we hold large positions."
Barclays said that while profit growth at Barclays Capital was strong, income was lower than at the beginning of last year. Top-line income was £3.8bn ($5.7bn), higher than the final two quarters of 2009 but lower than the very strong first two quarters of last year.
Profits at the bank's global retail banking business fell 6 percent to £403m ($604m) as the bank experienced further pressure on deposits and a worse performance from Barclaycard, the credit card business.
The UK business saw profits increase 20 percent, however, as customers saved more money.
CNN