Barclays gets boost from BarCap

5th Aug 2010 07:02

Barclays reported a 44% rise in first half pre-tax profits as a 225% profit jump at its investment banking arm, Barclays Capital, was partially offset by an increase in impairments in Barclays Corporate in Spain.Pre-tax profit rose to £3.95bn in the first half of 2010 compared with £2.75bn last time. Excluding movements on own credit, gains on acquisitions and gains on debt buy-backs, pre-tax profit increased by 22% to £2.96bn. Barclays Capital pre-tax profit more than trebled to £3.4bn from £1.05bn last year, while Barclays Corporate swung to a loss of £377m compared with a profit of £152m previously.Income rose 8% to £16.6bn, with Barclays Capital reporting a 30% increase in total income to £7.9bn.Impairment charges of £3.1bn were down 32%, despite of an increase of £433m in impairment on the Barclays Corporate loan book in Spain. Strong figures from the company's retail arm also boosted the interim figures. UK retail profits rose by 61% to £504m.The group paid a second interim dividend of 1.0p per share, making 2.0p for the half year."The period ahead will be one of great importance to the future of the industry as the final shape of the reform agenda starts to solidify," chief executive John Varley said, adding "We will engage fully in that dialogue, whilst keeping our eyes firmly on the needs and interests of our customers and clients."Varley also put up a vigorous defence on Barclays lending to both households and companies, after repeated claims by government ministers that banks are restricting lending to boost profit margins.He says the bank is approving more loans than in 2009 - with an 85% approval rate versus 80%. He also echoed comments from other lenders this week that a lack of demand is the problem."Loan applications have fallen steadily while approval rates - having been high in 2008 and 2009 - have gone higher in 2010.""There has been much comment about the banks not lending but the facts we are seeing point to a different picture. What we are seeing is loan applications falling steadily," he said.Barclays lent £35bn in 2009, he said, adding "We have continued that strong trend in the first half of 2010, lending an additional £18bn to UK businesses and households, despite widespread evidence of softer demand for credit."Loans to mid-sized firms had been flat while lending to the smallest companies had increased slightly, he added.