Barclays takes £2.8bn writedown as profits slide

Barclays Bank has taken a £2.8bn writedown hit as its profits fell 34% for
the first half of the year.

The bank’s disclosure yesterday in a statement included a fall in net income
to £1.72bn in the first six months of the year but the writedown surprised some
many experts by being more than £2.3bn of the average estimate of five analysts
surveyed by Bloomberg.

The Barclays Capital investment showed pretax profit of £525m, down 69% from
£1.7bn a year ago. The unit attributed the slide in profits to losses on
securities attached to US sub-prime mortgages.

‘They have written off significantly more than they flagged in June and
still the profit has met consensus. These are bad results, but in relative terms
they are pretty decent.’ said London-based analyst at MF Global Securities Ltd,
Simon Maughan.

The bank said it does not need more capital after it successfully raised
£4.5bn in last month’s sale of shares to investors and sovereign wealth funds
last month.

Further reading:

profit falls 34% on securities writedowns

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