Barclays profit falls, £1bn write-down
Barclays saw first quarter profits fall after the banking giant revealed £1bn worth of new credit crunch related write-downs.
The write-down for its investment banking unit is net of a £700m gain on the fair valuation of notes issued by Barclays Capital.
Today's statement did not contain any hints on whether Barclays plans to join rival Royal Bank of Scotland in asking its shareholders for new funds, but the bank refused to rule out a rights issue in a conference call with reporters.
"We are not going to rule in or rule out any option," said finance director Chris Lucas.
Group profit in the three month ended March was below that of the 'very strong' prior year period following tougher trading conditions in March. Pre-tax profit in January and February was broadly in line with the monthly run rate for 2007.
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Barclays expects Tier 1 capital and equity Tier 1 ratios to be slightly lower than the 7.6% and 5.1% reported as at 31 December, adding that it intends both ratios to be at least at its target levels of 7.25% and 5.25% respectively in time.
First quarter profits in Global Retail and Commercial Banking were ahead of the prior year period.
There was solid income growth at UK Retail Banking, with good performances in Current Accounts, Savings and Local Business reflecting increased customer deposits. Mortgage volumes were significantly higher than in 2007. Impairment charges increased slightly and mortgage impairment remained low. Pre-tax profit fell due to lower property credits but excluding these credits, profit increased strongly.
The group said profits of Global Retail and Commercial Banking and Investment Banking and Investment Management, excluding Barclays Capital for the month of April, exceeded those of the prior year period.
Barclays Capital remained profitable for the year to date.
