Barclays profit up 15% as impairment charges soar

by Gill Montia

Story link: Barclays profit up 15% as impairment charges soar

Barclays has reported a 15% rise in profit for the first quarter of 2009, compared to a year earlier.

The bank posted pre-tax earnings of £1.37 billion reflecting strong growth at its investment banking unit, which has been bolstered by the acquisition of Lehman Brothers’ US investment banking and capital markets businesses, last September.

Growth in this area offset a 45% fall in profit from the bank’s retail and commercial lending activities.

However, impairment charges and other credit provisions increased to £2.31 billion, up from £1.29 billion in the first quarter of 2008.

Barclays attributed the rise to adverse currency movements, a worsening economy and the maturation of loans.

Chief executive, John Varley, described trading in April as “generally consistent with the overall trend for February and March after an exceptional January”.

The group also warned that it expects its loan rate loss to increase across all business lines during 2009 and that the amount written down would be at the higher end of the 1.3% to 1.5% already forecast.