Barclays 18 per cent profits boost
Banking giant Barclays has reported a better-than-expected increase in profits as the group continued to run down its exposure to heavily indebted eurozone countries.
Barclays reported pre-tax profits of £2.4 billion in the three months to September 30, compared with £989 million the previous quarter. Pre-tax profits for the first nine months of the year are 18% higher than the previous year at £5.02 billion.
Barclays said the group's sovereign exposure to Spain, Italy, Portugal, Ireland and Greece reduced in the third quarter by 31% to £8 billion.
Elsewhere, its investment banking division, Barclays Capital, continued to feel the impact of increased global uncertainty, with flat revenues in the nine-month period.
Increasing global recession fears - driven by concerns over the eurozone debt crisis and the size of US debt - hit the banking sector hard in the period.
Chief executive Bob Diamond said Barclays had put in a "reassuring" performance during a period of "considerable challenge and uncertainty".
Mr Diamond said BarCap, which contributes to more than half the group's profit, had been "clearly impacted" by the market environment but said the division continued to make progress.
Elsewhere, Barclays said it had increased gross new lending to businesses to £33 billion, including £11 billion to small and medium-sized enterprises, putting them on track to meet Government-agreed Project Merlin targets.
Mr Diamond said Barclays expected the weaker market conditions to continue well into next year but it was still on course to meet targets set over the summer, including £1 billion in cost savings. He said the eurozone rescue deal struck last week was "calming and substantive" but there was more work to be done.
The weaker performance at BarCap was offset by a strong show at its UK retail banking division, which saw revenues increase 21% to £1.2 billion and pre-tax profits more than double to £494 million. Barclaycard saw pre-tax profits increase 54% to £378 million. Meanwhile, bad debt charges were down 34% to £2.8 billion.