Barclays profit soars on less exposure to EU debt

Barclays said pre-tax profits rocketed to ÂŁ2.42 billion (2.76 billion euros, $3.87 billion) in the three months to September 30 from ÂŁ327 million in the third quarter of 2010.

Its sovereign debt exposure to Greece, Ireland, Italy, Portugal and Spain was reduced by 31 percent to ÂŁ8.0 billion in the third quarter, helping offset a 15-percent drop in revenues at investment arm Barclays Capital.

"Eurozone country exposures continue to be managed closely and valued appropriately," the bank said in an earnings statement.

Barclays\' results were announced just a few days after a breakthrough deal to try and resolve the eurozone debt crisis.

EU leaders last week agreed to restructure Greek debt, bolster banks which would take losses as a result, help other countries struggling with debt and improving the bloc\'s bailout fund.

Barclays on Monday added that pre-tax profits jumped 19 percent to ÂŁ5.1 billion in the first nine months of 2011 compared with the equivalent period a year earlier.

"I am pleased with the performance we have delivered for the first nine months of the year ... despite significant economic and market headwinds," Barclays chief executive Bob Diamond said in the earnings release.

"These results demonstrate the continued progress towards our 2013 goals through building momentum across retail and corporate banking businesses and strong relative performance by Barclays Capital in difficult market conditions.

"Our focus on cost reduction continues to deliver results and we are confident that we will exceed the ÂŁ1 billion savings target we set earlier this year," Diamond added.

Barclays, which is the first of Britain\'s major banks to deliver latest quarterly results, said its net profit rose seven percent to ÂŁ2.65 billion in the first nine months. It did not provide a net figure for the third quarter.

Barclays rose to the top of London\'s benchmark FTSE 100 shares index in reaction to the results as the group\'s stock rallied 3.13 percent to 207.5 pence. The FTSE 100 was down 1.09 percent at 5,639.46 points in early deals.

"Barclays has bucked the trend of a broadly weaker market after an update which has exceeded expectations," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

"As expected, the investment banking unit has seen a significant decline in revenue, set against an erratic trading environment. Regulatory concerns remain a feature, even though the UK banks seem to have excused themselves from the European recapitalisation requirements.

"Meanwhile, the retail banking and credit card arms have performed well, whilst the lower bad debt charges and cost reduction programme provide further boosts," Hunter added.

© Copyright AFP Agence France-Presse GmbH - All rights reserved. This material may not be published, broadcast, rewritten or distributed. All reproduction or redistribution is expressly forbidden without the prior written agreement of AFP.