Barclays Q3 Profit Climbs Amid Sovereign Crisis

Barclays Plc, Britain’s second- biggest bank by assets, said third-quarter profit increased by 5 percent, beating estimates, even as the sovereign debt crisis hurt investment banking revenue.

Pretax profit before debt valuation adjustments in the three months to Sept. 30 increased to 1.3 billion pounds ($2.1 billion) from 1.27 billion pounds a year earlier, the London- based company said in a statement today. That beat the 1.24 billion-pound median estimate of 10 analysts surveyed by Bloomberg. Revenue at the Barclays Capital investment banking unit fell 15 percent to 2.25 billion pounds in the period. The shares rose.

“It has been a period of considerable challenge and uncertainty,” said Chief Executive Officer Robert Diamond, 60, on a conference call with journalists. All but one unit performed better than the prior and year-earlier periods, he said, and it was “no surprise” the investment banking unit was the exception.

Europe’s sovereign debt crisis crimped investment banking earnings as revenue from trading and underwriting bonds fell. Deutsche Bank AG said prdiscount nfl jerseysetax profit at its securities unit tumbled 94 percent in the third quarter, while UBS AG reported a 31 percent revenue decline at the investment bank.

“Barclays and HSBC Holdings Plc are getting the lion’s share” of investment banking business and “that’s the reason they’re doing okay,” Ralph Silva, a strategist at Silva Research Network in London said in a telephone interview. “The majority of business is being done by the secure banks, and in the U.K. there are only two banks in that environment.”
Increase Revenue

Barclays said in June it would seek to increase revenue by as much as 6.4 billion pounds by 2013, with more than a third coming from its securities unit. Revenue rose to 9.88 billion pounds in the period, from 6.29 billion pounds in the year earlier period.

U.K. consumer-banking pretax profit more than doubled to 494 million pounds in the third quarter. In Europe, the retail division swung to a profit of 52 million pounds after five quarters of losses. Pretax profit at Barclaycard, the credit card unit, rose 55 percent to 378 million pounds.

“Capital markets remained difficult in October, but have shown some improvement since the announcement by euro zone leaders last week,” the bank said in the statement. “Our retail, corporate and wealth businesses have performed broadly in line with their underlying run rates for the first nine months of the year.”
Shares Rise

Barclays stock rose 2.3 percent to 205.65 pence at 8:13 a.m. in London trading, the biggest gain among the 46 members of the 46-member Bloomberg Europe Banks and Financial Services index.

The bank said it’s generating sufficient capital for its business needs and doesn’t intend to raise new equity capital. The lender’s core Tier 1 capital ratio, a measure of financial strength, remained at 11 percent in the quarter.

“Our profits before tax have been generated equally across our retail and investment banking businesses, showing the diversity and balance of Barclays,” Diamond said in the statement.

The bank said on Aug. 2 that it would eliminate about 3,000 jobs this year as investment banking profit fell by more than 25 percent in the second quarter.

Barclays in June reiterated its target to gain a return on equBarclays Plc, Britain’s second- biggest bank by assets, said third-quarter profit increased by 5 percent, beating estimates, even as the sovereign debt crisis hurt investment banking revenue.

Pretax profit before debt valuation adjustments in the three months to Sept. 30 increased to 1.3 billion pounds ($2.1 billion) from 1.27 billion pounds a year earlier, the London- based company said in a statement today. That beat the 1.24 billion-pound median estimate of 10 analysts surveyed by Bloomberg. Revenue at the Barclays Capital investment banking unit fell 15 percent to 2.25 billion pounds in the period. The shares rose.

“It has been a period of considerable challenge and uncertainty,” said Chief Executive Officer Robert Diamond, 60, on a conference call with journalists. All but one unit performed better than the prior and year-earlier periods, he said, and it was “no surprise” the investment banking unit was the exception.

Europe’s sovereign debt crisis crimped investment banking earnings as revenue from trading and underwriting bonds fell. Deutsche Bank AG said pretax profit at its securities unit tumbled 94 percent in the third quarter, while UBS AG reported a 31 percent revenue decline atcheap nfl jerseys free shipping the investment bank.

“Barclays and HSBC Holdings Plc are getting the lion’s share” of investment banking business and “that’s the reason they’re doing okay,” Ralph Silva, a strategist at Silva Research Network in London said in a telephone interview. “The majority of business is being done by the secure banks, and in the U.K. there are only two banks in that environment.”
Increase Revenue

Barclays said in June it would seek to increase revenue by as much as 6.4 billion pounds by 2013, with more than a third coming from its securities unit. Revenue rose to 9.88 billion pounds in the period, from 6.29 billion pounds in the year earlier period.

U.K. consumer-banking pretax profit more than doubled to 494 million pounds in the third quarter. In Europe, the retail division swung to a profit of 52 million pounds after five quarters of losses. Pretax profit at Barclaycard, the credit card unit, rose 55 percent to 378 million pounds.

“Capital markets remained difficult in October, but have shown some improvement since the announcement by euro zone leaders last week,” the bank said in the statement. “Our retail, corporate and wealth businesses have performed broadly in line with their underlying run rates for the first nine months of the year.”
Shares Rise

Barclays stock rose 2.3 percent to 205.65 pence at 8:13 a.m. in London trading, the biggest gain among the 46 members of the 46-member Bloomberg Europe Banks and Financial Services index.

The bank said it’s generating sufficient capital for its business needs and doesn’t intend to raise new equity capital. The lender’s core Tier 1 capital ratio, a measure of financial strength, remained at 11 percent in the quarter.

“Our profits before tax have been generated equally across our retail and investment banking businesses, showing the diversity and balance of Barclays,” Diamond said in the statement.

The bank said on Aug. 2 that it would eliminate about 3,000 jobs this year as investment banking profit fell by more than 25 percent in the second quarter.

Barclays in June reiterated its target to gain a return on equity, a measure of profitability, of 13 percent by 2013. Cheap NFL Jerseysity, a measure of profitability, of 13 percent by 2013.http://zucalg.forumotion.net/t42-barclays-q3-profit-climbs-amid-sovereign-crisis