Barclays reported profits of £2.75bn, down from £4.1bn in the second half of 2007. The Bank’s group chief executive John Varley admitted this decline in profit of 33 per cent is “acutely disappointing”.
But there was growth in the UK mortgage sector. Barclays share of net new business in the first half of 2008 for mortgages was 26 per cent, compared with 6 per cent in the first half of 2007. The bank also revealed that it raised £4.5bn in new equity in July 2008.
Barclays blamed the lower profits on its investment banking and investment management arms, which lost heavily as a consequence of the recent credit market crash. Barclays Capital profits fell 68 per cent to £524m. These losses were thanks to nearly £2bn in debt writedowns.
Varley adds: “The conditions in the market that we have seen over the course of the last twelve months are as difficult as we have experienced in many years. It may take quite some time for volumes to be restored to those we have seen in the past.”
“In the difficult environment of the first half of 2008, Barclays remained solidly profitable, albeit at levels below the performance achieved last year.”