Barclays’ profits near £3bn

Barclays today announced a sparkling set of results which will almost certainly mean big bonuses for many of its staff. It made £2.98bn in pre-tax profit for the first half of this year, against £2.75bn in 2008, an increase of eight per cent.

The improvement was in large part due to the group's investment banking division, Barclays Capital, which saw its profits double from £524m in the period to £1.05bn. The earnings will be seen by many as vindication of the group's decision to go it alone without government money earlier this year.

Although a good performance overall, the results were somewhat lower than analysts' estimates, which had the bank making over £3bn in profit, and there is likely to be disappointment at the performance of the group's UK retail banking division, which saw its profits more than halve to £268m from £690m the year before.

Remuneration at Barclays' investment banking division is set to double as a result of the performance there, which will mean average payouts of £250,000. Although Barclays avoided taxpayer funding, turning instead to Middle Eastern investors in a controversial move, the bumper payday is certain to revive the arguments over bankers' rewards.

HSBC will announce results later today, with Lloyds Banking Group reporting on Wednesday and Royal Bank of Scotland, owner of NatWest, to make its announcement on Friday.

WHAT THEY ARE SAYING:John McFall, the chairman of the Treasury Committee of MPs, in the Times: "Bonuses coming back online with a bang so quickly while we are still in recession will just not be understood by the public. Banks have a social responsibility here and it seems that they are not living up to it. It was the banking crisis which sent the country into a tailspin in the first place."

Ralph Brook-Fox, a fund manager at Ignis Asset Management on Bloomberg: "There’s been a clear concentration of market share amongst the winners, like Deutsche Bank, JPMorgan, Credit Suisse and Barclays. That looks set to continue." ·