The end of the banking crisis that triggered the UK recession could be in sight after banking giants Barclays and HSBC today reported multi-billion pound profits.

Barclays, which received no financial assistance from taxpayers, saw group pre-tax profits rise to £2.98bn — up 8% after a bumper six months for its investment banking arm. The firm's investment banking division — Barclays Capital — posted a 100% increase in profits to £1.05bn.

Ralph Silva, banking analyst at Tower Group, said: “Investment banking is back. If you are a big company you are going to gravitate towards banks that have not received government funds.”

Rival HSBC, which has also managed to shore up its finances in the crisis without a Government hand-out, announced profits of $5bn (£2.98bn) today. Although HSBC said that profits had fallen 51% as its debt charges soared, its profits are double what some analysts had forecast.

And on Friday, bailed-out Royal Bank of Scotland, parent group of Ulster Bank, is tipped to report first-half pre-tax profits of £1.2bn after a record loss of £24bn in 2008.

It comes a year after the collapse of the financial system, which forced the Government to nationalise a number of banking giants and triggered substantial job losses in the sector.

Today’s positive results for Barclays, which has been operating in Northern Ireland for more than a decade, also come after a recent run of data that indicates the worst of the recession may now be behind us.

Industry body CBI said the prospects for smaller firms are starting to improve, according to research today.

Leading UK shares closed on Thursday at their highest level for almost seven months, after better-than-expected corporate results boosted investor confidence.

The FTSE 100, which had endured an 11-day winning strike, finished up 84 points, or almost 2%, at 4,631.6 — its highest close since January 6.

Meanwhile, mortgage lending climbed to a 14-month high according to the Bank of England while the number of mortgage approvals rose for the fifth month in a row, the latest figures show.

And last week the latest survey from Northern Bank showed that consumer confidence in Northern Ireland was at a 10-month high.

However, Barclays did see bad debts almost double.

Impairments and other credit provisions jumped to £4.56bn, up 86% from £2.45bn in the first half of 2008.

Barclays chief executive John Varley said: “We are realistic about just how difficult the environment is, and will remain, but we are committed to delivering another year of solid profitability through our continued emphasis on serving our customers and clients.”