Home Financial News Barclays bank first-half net profit slides 38% to £1.5 bln

Barclays bank first-half net profit slides 38% to £1.5 bln

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British bank Barclays announced its first half net profit slid 38 per cent as investment division revenues fell and after it set aside £1.0 billion to compensate clients who were mis-sold credit insurance.   

Earnings after tax dived to £1.50 billion ($2.44 billion, 1.72 billion euros) in the six months to June, compared with £2.43 billion in the same part of the previous year, the bank said in a results statement.

Market expectations had been for a net profit of £1.31 billion, according to analysts polled by Dow Jones Newswires.

Pre-tax profit sank 33 per cent to £2.64 billion in the first half, compared with £3.95 billion last time around. However, stripping out the special provision and other exceptional items, pre-tax profit rose 24 per cent to £3.68 billion as lower bad debts boosted the lender.

Impairment charges and other credit provisions dropped 41 per cent to £1.83 billion. Group income meanwhile stood at £15.24 billion, little changed from £15.73 billion the previous year but income at investment banking arm Barclays Capital was down 11 per cent to £6.26 billion.

“I am pleased with the progress made across Barclays in the first half,” Chief Executive Bob Diamond said in the earnings release.    “We have delivered underlying profit before tax up 24 per cent … despite a lacklustre economic environment in many of our major markets which impacted income generation.

“Our operating expenses have been tightly controlled while we have continued to invest in selected growth initiatives in a number of our businesses.”

Barclays said in May that it would set aside £1.0 billion after British banks lost a high court appeal against tighter regulation of so-called payment protection insurance (PPI).

London, Aug 2, 2011 (AFP)