Barclays forecasts profit of £7.1bn

by Gill Montia

Story link: Barclays forecasts profit of £7.1bn

Barclays has reported that it expects profits from its High Street and Barclaycard operations to offset a £1.3 billion credit write down at Barclays Capital, its investment business.

The bank is forecasting pre-tax profits for the full year of around £7.1 billion, despite the fact that Chris Lucas, finance director at Barclays, has described its retail banking operations as “a mixed story”.

According to Mr Lucas, “Mortgages, savings and current accounts are performing well in line with the first half. Unsecured lending and payment protection insurance - both of these have been performing less strongly, as a result of the stance we have taken to risk.”

With this in mind, he believes that growth in revenues at Barclays retail bank will be at a slower rate in the second-half of 2007 than the first.

In the six months to the end of June, revenues increased 5%, and profits by 9% and the trading update implies that the UK’s third-largest bank is set to increase pre-tax profits by around 4% this year.

Analysts are taking the view that in the current market conditions the performance is highly creditable.

However, questions are still being asked about further exposure of Barclays Capital to the US sub-prime mortgage crisis.