Barclays bank enjoys soaring first-quarter profits

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British bank Barclays said Friday that net profit soared 29 percent in the first quarter of 2010, boosted by tumbling bad debts, signs of economic recovery and a strong investment banking division.

Net earnings rose to 1.07 billion pounds (1.24 billion euros, 1.64 billion dollars) in the three months to March from 826 million pounds in the same period of 2009, Barclays said in a statement.

Pre-tax profit jumped 47 percent to 1.82 billion pounds, with revenues up four percent to 8.07 billion pounds.

Impairment charges and other credit provisions meanwhile dived by 35 percent to 1.51 billion pounds.

"I am pleased with the strong growth in profits which we have delivered this quarter," chief executive John Varley said in the trading statement.

"Diversification of our business and risk, and good underlying performance, have combined to produce this result," he said.

"The improvement that we have seen in impairment (levels) reflects the signs of economic recovery now evident in many of the markets in which we operate."

Pre-tax profit at investment banking unit Barclays Capital soared 62 percent to 1.47 billion pounds, reaping the benefits of operations bought from collapsed US bank Lehman Brothers at the height of the financial crisis.

However, Barclays shares sank on the London stock market as traders set aside news of bumper first-quarter profits and took the opportunity to cash in their gains.

The bank's share price sank 4.55 percent to 344.8 pence in late morning deals.

"Barclays posted some solid results ... although admittedly a degree of profit taking is being seen here," said IG Index analyst Anthony Grech.

Nevertheless, Barclays issued an upbeat outlook for the remainder of the financial year.

"Month to date trading for April has been consistent with the trends over the first quarter," it said.

"We are encouraged by the continued improvement in impairment levels that we are experiencing, reflecting a better economic environment in many of the markets in which we operate.

"We continue to operate with strong capital and liquidity levels in anticipation of future regulatory requirements."

Barclays survived the international credit crunch without government support unlike rival British banks that were bailed out by the taxpayer.

Instead, the group won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar.

Abu Dhabi has since sold most of its holding, while Qatar's sovereign wealth fund, the Qatar Investment Authority, has trimmed its Barclays stake.

© 2010 AFP

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