Barclays Gets One-Time Investment Banking Boost

Monday, 31 Oct 2011 09:15 AM

 

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Barclays PLC reported a 7 percent rise in net profit in the first nine months on Monday, largely on the back of a one-time boost from investment banking.

The bank reported a net profit of 2.65 billion pounds ($4.25 billion) compared to 2.48 billion pounds a year earlier.

Revenue was up 10 percent to 25.2 billion pounds in part due to a 3 billion pounds credit gain in the third quarter.

The bank said the gain came from widening spreads on Barclays Capital's structured products, a range of investment products which typically include complex derivatives.

For the third quarter, pretax profit was up from 327 million pounds a year ago to 2.4 billion pounds, again reflecting the one-off gain. Adjusted pretax profit for the quarter was up 5 percent to 1.34 billion pounds, broadly in line with the market consensus.

The adjusted figure excludes the own credit, a 1.8 billion pounds writedown on its stake in the investment firm BlackRock Inc. and other one-time items.

Barclays Capital third-quarter income excluding the gain was down 15 percent to 2.25 billion pounds.

Barclays shares were up 2.9 percent to 207 pence in early trading on the London Stock Exchange.

"Overall, these results are slightly better than we had expected," said Gary Greenwood, analyst at Shore Capital, who nonetheless rates the shares as "sell."

The bank reported that it had reduced its exposure to sovereign debt in Spain, Italy, Portugal, Ireland and Greece by 31 percent in the quarter to 8 billion pounds, with about half of the remaining exposure in Italy.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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