Barclays: £1bn crunch write-off
Thursday, 15 May 2008 09:12
Banking: Barclays rides through crunch storm with £1bn write-off
Barclays today announced a £1 billion write-off – blaming the current market volatility of the credit crunch.
As a result profits are set to down for the first for the first quarter - but the bank did not announce a rights issue in its interim statement,
As a result shares in the lender rose 1.35 per cent in early trading on the FTSE 100.
Chief executive John Varley said: "Our 2008 performance continues to benefit from the diversification of our business in recent years. Our investment banking and investment management businesses were profitable in challenging market conditions."
Barclays reported increased customer deposits, in line with many other banks, but also said that mortgage volumes were "significantly higher" than in 2007 and mortgage impairment remained low.
The bank's credit card unit Barclaycard performed strongly, according to the statement, while Barclays capital was profitable despite challenging trading conditions.
The bank warned that its tier 1 capital - a key measure of a bank's financial strength – would be slightly lower than the 7.6 per cent reported as at 31st December 2007.
Barclays said it intends to raise its ratio to 7.25 per cent "in time", but did not propose going to its shareholders for cash to bolster its capital, unlike several other banks including RBS, HBOS and yesterday Bradford & Bingley.
Sarah Routledge
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