Barclays profit up to almost £3bn

Profits at Barclays' investment banking arm doubled Barclays has announced an 8% rise in first-half profits, boosted by its investment banking division.

Pre-tax profits for the first six months came in at £2.98bn ($5bn), although this was slightly below analysts' forecasts.

Its investment bank Barclays Capital saw profits double to more than £1bn, having picked up some still-successful operations from Lehman Brothers.

But profits at Barclays' UK retail banking arm more than halved.

Profits at Barclays' investment banking arm doubled

 The BBC's business editor Robert Peston says the striking number in Barclays' results is the massive reduction in loans and investments across the world, which have come down from £2 trillion to £1.5tn.

Shares in Barclays rose 4.9% in early trading. Barclays is the first major UK bank to report its half-year figures, with Lloyds and Royal Bank of Scotland reporting later in the week.

Investment banking 'back' Barclays has not accepted government bail-outs.

"Investment banking is booming again - partly thanks to the frenzied attempts by big companies and governments to raise vast amounts of new money "

Robert Peston, BBC business editor

Ralph Silva, banking analyst at Tower Group, said that not accepting government money would have contributed to Barclays Capital doing so well.

"Investment banking is back. If you are a big company you are going to gravitate towards the banks that have not received government funds," he said.

Profits at Barclays Capital rose to £1.05bn from £524m a year ago.

But profits at its UK retail banking division fell 61% to £268m, from £690m a year ago.

Bad debts almost doubled. Impairments and other credit provisions jumped to £4.56bn, up 86% from £2.45bn in the first half of 2008.

 'Strong performance'

Barclays said it had gained more investment banking clients thanks to the acquisition of some Lehman Brothers businesses in 2008.

The addition of some of the Lehman businesses also "increased significantly" Barclays' presence in the US, the bank said.

The US now accounts for about 40% of its income.

Barclays chief executive John Varley was upbeat on the bank's prospects for the rest of the year.

 "The investments we have made, particularly in our international businesses, are driving very strong income performance and allowing us to absorb the consequences of the economic downturn," he said.

"Our goal for 2009 is very clear: we seek to deliver another year of solid profitability. Our first half performance is a good start to this."

sourced from The BBC