Banking on growth

7 August 2008 By George Hay Follow @gfhay

The UK bank has provided much more detail on its subprime exposure and beaten bearish profit expectations. But Barclays is still eyeing growth opportunities, despite conceding that the outlook is tough. If the downturn worsens, it won t have headroom for a buying spree.

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Barclays has revealed that pretax profits fell 34% to £2.8bn for the first half of 2008.

The UK's third largest bank still beat analysts' estimates of £2.5bn. However, it took creditrelated writedowns of £2.8bn, ahead of the £2.3bn expected.

Barclays Capital, the investment banking arm, saw pretax profit fall 69% to £524m, down from £1.7bn in the first half of 2007.

Barclays shares fell 2% initially, then leapt up 5%. At 11.30am, they were up 2.3% at 378.5p.

Barclays chief executive, John Varley, reiterated that he would pay a dividend of 11.5 pence a share in cash for the first half. But he cautioned that market conditions were very difficult.

"It would be wrong in this review to suggest that the market conditions over the foreseeable future will be anything other than tough," he said.

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