Barclays announces 15 percent increase in full-year profits

Barclays announces 15 percent increase in full-year profits

	Published : Tue, 21 Feb 2006 13:45 By : Richard Owen Print this Story

LONDON - Barclays PLC announced a 15 percent increase in full-year profits yesterday with a robust performance in investment banking making up for the losses in the credit card division that has been hit by bad debts.

Britain's third largest bank reported pre-tax profits of £5.28 billion in the year ending December 31, 2005. This is an increase of 15 percent on the previous year and falls in line with analysts' predictions that had forecast £5.1-5.4 billion. This robust showing was mainly due to the 25 percent jump in investment banking services that increased to £1.272 billion.

This offset the 19 percent downturn at Barclaycard where pre-tax profits stood at £687 million as compared to £843 million reported at the same time last year. The bank said that a "significant rise in impairment charges" at Barclaycard was responsible for this dismal showing. "It's easy to lose sight of the fact that income at Barclaycard was actually up by 15 per cent. While profits were down 19 per cent overall, a large part of that was delivered by Juniper," said Naguib Kheraj, the finance director at Barclays.

He added that the "consumer credit factor" would continue to be challenging in the UK. The underlying bad debts at Barclays increased by 24 percent over the last 12 months. These were not helped by the acquisition of Absa, the South African banking group. If the latter was taken into account, bad debts posted a 44 percent rise.

Barclays’ chief executive John Varley said that the British economy would grow reasonably this year, but denied reports that he was looking to expand internationally, "If we look at the portfolio businesses, we can see - simply by virtue of managing the businesses we have - how we can increase [profits] to 50 per cent over the next three years," he said.

"We've got a lot of momentum in the international business. We have made acquisitions, but I emphasize we are not reliant on acquisitions." The bank announced a dividend of 26.6 pence this year, up by 11 percent over the last time. Barclays shares closed at 644 pence yesterday.