Barclays confirms investment banking dip

30th Jun 2010 15:58

Barclays' finance chief today confirmed that conditions in investment banking have been "softer" during the past two months and falling real estate prices have hit Barclays Corporate in Spain. At an investor seminar today, Chris Lucas said the trends underlying the bank's performance in the second quarter have been similar to those in the first three months of 2010.A big surge in business at Barclays Capital and decline in impairments had profit up 47% to £1.82bn in the first quarter of 2010. Investment banking arm, Barclays Capital, raked in £1.47bn, 62% more than the year before. But there have been exceptions, Lucas said Wednesday. Softer investment banking conditions in May and June were blamed on lower levels of capital markets and M&A activity.Impairment trends at the Spanish retail banking unit continue to improve, although conditions in Barclays Corporate in Spain "worsened" due to the property slump.Guidance for impairment overall for Barclays this year remains for an overall improvement of 15-20% compared with 2009."Finally, Barclays credit spreads have widened over Q2 and this will result in a not insubstantial own credit gain," added Lucas.The Global Retail Banking business is targeting mid-single digit compound annual growth for income, broadly stable net interest margins, and tight cost control to deliver average net cost growth of 2-3% per annum from a 2009 baseline of £5.7bn."These targets, which are subject to current macro-economic planning assumptions, are designed to deliver strong compound annual profit growth over the period 2010 to 2013 for GRB in aggregate," it said."In this context Barclays has set a target for GRB to achieve an average return on equity through the cycle of 13-15%."