Barclays ups ’07 writedown to $3bn, reports lower net
Overall, the numbers came in broadly in line with our expectations and consensus.
By Agencies |
LONDON: Barclays, Britain���s third-biggest bank, raised its 2007 writedown on the value of risky assets to ��1.6 billion ($3.1 billion) but reported profits broadly in line with analysts��� expectations. Barclays is the first big UK bank to report earnings after a turbulent year and analysts said Tuesday���s numbers ��� including a lower-than-expected ��300 million increase in writedowns and a 10% dividend rise ��� were good news for the sector.
���Overall, the numbers came in broadly in line with our expectations and consensus, and that���s a relief,��� said Mamoun Tazi, analyst at MF Global. ���BarCap performed in line despite the writedowns, which highlights the fact the underlying business is very strong.���
Barclays reported a 2007 pretax profit of ��7.08 billion, down from ��7.14 billion in 2006. Underlying profits, which exclude sales of businesses, rose 3%.
The bank said it is confident it knows where its risks are and is comfortable with the current levels of writedowns, but its shares were still hit by a surprise near $3 billion writedown at Credit Suisse that showed markets remain tough and exposures can change quickly.
Profits at Barclays Capital, its investment bank arm, rose 5% to a record ��2.34 billion, above expectations. UK banking was in line with expectations and both retail banking and Barclaycard, where profits rose 18 percent, benefited from a drop in bad-debt charges, although there was a jump in impairments on US subprime mortgages.
Barclays is striving to reassure investors it can grow its domestic and international retail arm and has a clear strategy after losing a bid battle to buy Dutch rival ABN Amro last year which would have made it a top 10 global bank. Overseas businesses contributed two-thirds of group profit, compared with just 20% in 2003, and the bank added 600 international branches, boosting distribution by a third.
���Overall, the numbers came in broadly in line with our expectations and consensus, and that���s a relief,��� said Mamoun Tazi, analyst at MF Global. ���BarCap performed in line despite the writedowns, which highlights the fact the underlying business is very strong.���
Barclays reported a 2007 pretax profit of ��7.08 billion, down from ��7.14 billion in 2006. Underlying profits, which exclude sales of businesses, rose 3%.
The bank said it is confident it knows where its risks are and is comfortable with the current levels of writedowns, but its shares were still hit by a surprise near $3 billion writedown at Credit Suisse that showed markets remain tough and exposures can change quickly.
Profits at Barclays Capital, its investment bank arm, rose 5% to a record ��2.34 billion, above expectations. UK banking was in line with expectations and both retail banking and Barclaycard, where profits rose 18 percent, benefited from a drop in bad-debt charges, although there was a jump in impairments on US subprime mortgages.
Barclays is striving to reassure investors it can grow its domestic and international retail arm and has a clear strategy after losing a bid battle to buy Dutch rival ABN Amro last year which would have made it a top 10 global bank. Overseas businesses contributed two-thirds of group profit, compared with just 20% in 2003, and the bank added 600 international branches, boosting distribution by a third.
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