Barclays shrugs off BarCap slowdown

9th Nov 2010 06:40

Barclays eked out a small increase in nine-month profit following an 8.5% rise during the third quarter, though the investment banking arm made 14% less than it did the quarter before.Profit for the three months to 30 September rose to £1.27bn from £1.17bn, but dropped to £327m from £2.1bn including an own credit charge of £947m. Impairment charges fell to £1.22bn.Under current accounting rules, banks book an 'own credit' loss when their credit profile improves, meaning it would cost more to buy back its bonds.Barclays Capital, run by Bob Diamond who takes over as chief executive next March, ramped up nine-month profit to £3.22bn from £1.42bn in 2009. Excluding own credit it jumped 22% to £3.31bn. But the three-month figure was down to £2.83bn from £3.28bn in Q2 and £3.85bn at the beginning of the year.Challenging market conditions and a "seasonal reduction in activity" were to blame for a drop in demand and 14% slide in profits at the fixed income, currency and commodities business, and 36% slump in equities and prime services.So far this year, the bank has made £4.27bn, up 4% on the same time last year, or 6% to £4.24bn excluding movements on own credit, gains on acquisitions and disposals and gains on debt buy-backs. Impairment charges have been slashed by 31% to £4.30bn.Barclays Corporate turned last year's £300m nine-month profit to a £414m loss this time. Despite a 20% increase in the UK, an impairment charge of £198m in Spain for the third quarter added to the £553m reported for the first half. That meant the Continental Europe business has lost £712m so far this year compared with a £26m profit last year.On overall trading, the company said group income in October was consistent with the run rate for the first nine months of the year. "At Barclays Capital, top-line income in October was consistent with the run rate for the third quarter."Outgoing CEO John Varley called the results "resilient" and said the business is "well equipped to deal with regulatory change as Basel III is implemented between now and 2019".