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Thursday 08th of July 2010

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July 1, 2010

Barclays flags up investment banking downturn

by Gill Montia

Story link: Barclays flags up investment banking downturn

At a seminar yesterday focused on Barclays’ global retail banking businesses, the group’s finance director, Chris Lucas, commented that the trends underlying the bank’s performance in the second quarter of 2010 have been similar to Q1.

However, he noted exceptions as follows:

“As has been widely reported, investment banking market conditions
in May and June have been softer, in particular reflecting lower levels of
capital markets and M&A activity.

“Whilst impairment trends in our Spanish retail banking business
continue to improve, conditions in Barclays Corporate in Spain have
worsened reflecting continued downward movements in real
estate valuations in Spain.

“Our guidance for impairment overall for Barclays in 2010 remains for
an overall improvement over 2009 of between 15 and 20%.

“Finally, Barclays credit spreads have widened over Q2 and this will
result in a not insubstantial own credit gain.”

In 2009, the group’s investment banking and investment management businesses put in a strong performance upheld by a pre-tax profit increase of 89% at Barclays Capital, to £2.46 billion.


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