Barclays on course despite bad debt spike

10th Nov 2009 06:59

Barclays remains on course for a record-breaking year after third quarter profits came in close to market forecasts.For the three months to September, profits fell from £2.84bn to £1.56bn, giving a nine-month total of £4.54bn (2008: £5,595m), a decrease year on year of 19% (£1,053m). The underlying picture for the year so far was stronger with profits rising by 116% to £4.41bn (2008: £2,046m) excluding a charge on own credit of £1.3bn gains on acquisitions and disposals of £178m (2008: £1,589m), and gains on debt buy-backs of £1,249m (2008: £9m). Third quarter income rose to £7.55bn from £6.99bn. For the year so far, income increased 26% to £23.8bn (2008: £18.8bn) driven by very strong income growth in Barclays Capital and the international businesses within Global Retail and Commercial Banking. Bad debts for the nine months rose significantly to £6.2bn (2008: £3.76bn), though Barclays said, "We currently expect impairment for the full year to be around the bottom end of the previously referenced 2009 consensus range of £9.0bn to £9.6bn."Global Retail and Commercial Banking income grew by 11% in the nine months ended 30th September 2009, ahead of cost growth of 4%. Impairment for the nine months was significantly above the prior year period. As a result profit before tax declined to £2.18bn for the nine months ended September (2008: £3.11bn).Profits fell at UK Retail Banking for the nine months , impacted by the current economic conditions. Income decreased reflecting the impact of liability margin compression, which more than offset higher income from Home Finance. Income at Investment Banking and Investment Management for the nine months increased 32%, largely driven by the performance of Barclays Capital."We have maintained strong income momentum in the third quarter, particularly in Barclays Capital and across the international activities of GRCB, enabling us to achieve consistent profitability across the first three quarters of 2009. This performance shows the resilience and diversification of our portfolio of businesses," chief executive John Varley said.Underlying its confidence, Barclays added it will resume dividend payments and announced a 1p payment. A final dividend will also be announced with the full year figures.