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London - British bank Barclays has boosted first-half profits by nearly a third thanks to a sharp drop in bad debts, as well as strong lending and investment banking activities, it announced on Thursday.
The results are another sign of revival by the banking sector, severely hit during the economic crisis, since several banks have reported strong figures in the last few days.
Barclays said that net profit was £2.4bn in the six months to June, up 29% from the figure for the first half of 2009.
Pre-tax earnings leapt 44% to £3.9bn. Investment banking unit Barclays Capital more than tripled this figure to £3.4bn.
Bad debt charges plunged 32% to £3.080bn, while income rallied 25.5% to £13.501bn.
The bank was also lifted by an £851m credit gain related to improving debt positions. On an underlying basis, with those gains stripped out, pre-tax profits advanced 22% to £3.0bn.
"Against the backdrop of subdued economic and market activity and the sovereign debt storm of the second quarter, we have delivered good growth in income and profits during the first half of the year," Barclays chief executive John Varley said in the results statement.
"At the same time as lending a further £18bn to UK households and businesses, we have kept the regulatory balance sheet under tight control."
His comments followed a recent call from the British government for the banking sector to use their first-half profits to boost lending to businesses that are struggling to obtain funds.
Barclays is the latest British bank to report surging profits, continuing a trend set by rivals HSBC, Lloyds Banking Group and Standard Chartered earlier this week. Royal Bank of Scotland unveils its latest figures on Friday.
Despite the bumper results, Barclays' share price fell 2.93% to 329.9 pence in late morning deals on London's FTSE 100 index of top shares, which rose 0.44% to 5 409.75 points.
"In all, this is a robust performance given a difficult first half of the year," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.
"The reliance on the investment banking operation, where progress has slowed, continues to cast something of a shadow over the shares."
Trading revenues at the investment arm Barclays Capital fell 15% in the second quarter compared with the previous three months. The division has a large US business after the purchase of operations from collapsed bank Lehman Brothers in late 2008.
Barclays survived the financial crisis without government support unlike some rivals, because it obtained a £7bn capital injection largely backed by Abu Dhabi and Qatar - which have both since trimmed their stakes.
The British bank is sponsoring London's new cycle hire scheme that was launched by Mayor Boris Johnson last week.
- Reuters
