Profits soar at Barclays

Banking giant Barclays today reported a strong start to 2004 with first quarter profits up “significantly” on the same period a year earlier.

In a trading update, chief executive Matt Barrett said the improvement had been broadly based with Barclaycard among businesses performing well.

The strong start to the year comes three months after Barclays announced that profits for 2003 improved by 20% to £3.84bn (€5.7bn).

The company did not give figures in today’s update but said that while the performance was against a weak first quarter of 2003 the result still represented a strong gain on the quarterly average for 2003.

Mr Barrett added: “Barclays has made a strong start to 2004, demonstrating continued success in implementing our growth strategy both in the UK and internationally.”

In UK retail banking, Barclays said income increased modestly, although balances remained in line with end of 2003 levels. Costs in the division were also well under control, the company added.

Shares fell more than 2% despite the profits leap as investors took note of the modest performance in UK retail banking.

Barclaycard’s strong performance came after higher balances compensated for the modest margin pressure resulting from higher interest rates.

There was also an excellent quarter for investment banking business Barclays Capital following record levels of client activity and an improved market environment, the company added.

Paul Kavanagh of stockbroker Killik said the shares fall also reflected revisions to profit expectations: “Overall, there appears to be little wrong with these numbers.

“However, in recent sessions, we have seen a number of downgrades from analysts in their ratings for the stock which has led to a little pressure.”