Barclays posts impressive £2.98 billion profit

Barclays, the UK bank that shunned the government bailout in favour of Middle East money, (See: Barclays shuns UK bailout loan in favour of Middle East money) has posted an impressive first-half profits of £2.98 billion riding on a strong performance in its investment banking division.

Britain's second-largest lender said today that its profits rose by 8 per cent to £2.98 billion in the first half of 2009 compared to £2.75 billion for the same period last year.

Although the results fell slightly short of analysts expectations of £3.5 billion, the Canary Wharf, London-based bank did exceptionally well despite the global financial turmoil, which has bought some of the largest banks to their knees.

Barclays massive profits rode on the strong performance from the investment banking division, Barclays Capital, which posted an impressive 100 per cent increase in profits to £1.05 billion.

But at its UK retail banking arm, profits were down 61 per cent to £268 million from £690 million a year ago, which the bank said was against a backdrop of a "challenging" economic climate as it was hit by rising impairments on corporate and consumer loans.

The bank revealed that bad debts had soared by 86 per cent to £4.56 billion while its writedowns on credit losses was £3.5 billion.

Chief executive John Varley said, "The environment has remained very difficult in 2009 as a consequence of the onset during 2008 of economic recession in most parts of the world in which we operate."