Barclays yesterday notched a 44% hike in half-year profits to £3.9bn as plunging bad debts offset a slowdown in its star investment banking arm.
Figures revealed that sharply lower write-downs helped it deliver £3.4bn of profits in the Barclays Capital division - more than 80% of its overall profits haul.
Barclays said it set aside another £1.7bn in bonuses for staff across the bank, or £1.4bn excluding money deferred from previous years - up 18% year-on-year.
The results were delivered against a backdrop of a "sovereign debt storm" in the second quarter.
The BarCap division's top line income was down by almost a third, while it said trading revenues were 15% lower in the second quarter compared with the previous three months.
Shares eased back 3% as investors reacted to the BarCap slowdown and also looked to take profits after a month-long rally that has seen the stock rise by around 30%.
Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said: "The reliance on the investment banking operation, where progress has slowed, continues to cast something of a shadow over the shares."
But he added: "In all, this is a robust performance given a difficult first half of the year."
Its results keep up the momentum of a strong first half for UK banks as the sector makes a strong recovery from the financial crisis.
But the sector's profits cheer is likely to fuel anger over lending levels to businesses, as banks come under attack for failing to ease the flow of credit.
Barclays chief executive John Varley claimed the bank was approving more loans than in 2009 - with an 85% approval rate versus 80%.
He said that, despite criticisms levelled at banks over lending, "the facts that we have seen paint a very different picture".
"Loan applications have fallen steadily while approval rates - having been high in 2008 and 2009 - have gone higher in 2010."