Barclays profits down in first quarter

Banking group Barclays said today first quarter profits were down on last year after a sharp decline at its investment banking arm.

Chief executive John Varley said results from the group’s retail and commercial banking increased year on year during the first three months of 2008, but that its Barclays Capital arm was well down on last year’s strong showing.

In a statement released ahead of the group’s annual general meeting today, he said overall trading during January and February had been in line with 2007 but “tougher” conditions in March dragged the quarter down.

Barclays has been tipped to follow rival Royal Bank of Scotland and raise new capital from investors to bolster its balance sheet amid the credit crunch.

Mr Varley made no explicit statements about the need for extra funding but said: “We will remain active managers both of our balance sheet, and of our capital ratios.”

He also alluded to the difficult times being faced by banks but said there was a need for a sense of perspective. “It’s very important that risk management doesn’t become risk aversion,” he said.