Barclays bank celebrates sharp rise in profits

Barclays Banks said today it made 15 per cent more in profit during the first three months of the year than in the same period of 2008. Pre-tax profits came in at £1.37bn and total revenue nearly doubled to £8.15bn after strong performance at its investment banking operation Barclays Capital.

Profits before tax at the unit were £1.05bn, nearly three times the previous year's number. Analysts will be looking at the figures closely in view of the high street bank's decision not to take part in the Government's Asset Protection Scheme like rivals RBS and Lloyds, instead raising £7bn from a group of Middle Eastern investors.

The bank had to contend with write downs of £2.61bn and the costs associated with the purchase of some Lehman Brothers operations, but future results should be boosted by the recently-agreed sale of its iShares fund management arm for £3bn.

It said trading in April was continuing in the same positive vein as in the previous two months, after an "exceptional" January. The bank joins its counterparts across the world in announcing a turnaround in business for the period.

Chief Executive John Varley said: "We generated strong income growth across most business lines driven by the investments we have made in expanding our international network and in buying Lehman. This, together with good cost control, has enabled us to shield the anticipated increase in impairment and absorb further credit market write-downs on legacy assets."

WHAT THEY ARE SAYING
Adrian Cox, FT: "Almost two years after the credit boom turned to bust, three US banks – JPMorgan Chase, Goldman Sachs and Morgan Stanley – and three Europeans – Credit Suisse, Deutsche Bank and Barclays – often pop up as candidates. But with continuing uncertainty about balance sheets, a regulatory system in flux and a global economy in recession, trying to pick out the winners and losers now is like “stopping the clock in 1943 and saying who’s winning [in the second world war]"

Sara Schaefer Munoz, Wall Street Journal: "The windfall from trading is likely to be short-lived. For one, analysts expect increasing competition to slash the profits banks can make on simple trades. Markets could also become less volatile as central banks flood them with cash, cutting into investors' desire to buy financial products that allow them to profit from - or protect themselves against - big moves in interest rates." ·