Barclays, Britain’s third-biggest bank, reported a 2007 pretax profit of 7.08 billion pounds, down from 7.14 billion in 2006 but just above an average forecast of 7.05 billion from Reuters Estimates. Underlying profits, which exclude sales of businesses, rose 3 percent. The results included a £1.6b ($3.1 billion) writedown on the value of risky assets.
Barclays’ shares have fallen 40% in the past year on uncertainty over its exposure to US sub-prime mortgages following the US housing slowdown.
Barclays increased its dividend 9.7% to 34 pence from the 31 pence paid on 2006 earnings. The rise represented a slight slowdown from the 10% dividend increase a year ago.
Profits at Barclays Capital, its investment bank arm, rose 5 percent to a record 2.34 billion pounds.
Within its divisions, Barclays said that profits at its UK retail business grew 9pc to £1.28bn, while its commerical bank saw profits rise 5pc to £1.3bn. Profits at its international retail business, excluding its South African arm Absa, reached £246m.
Earnings at Barclaycard jumped 18pc to £540m.
"Barclays delivered a resilient performance in 2007, with profits broadly in line with the record prior year results,"" said chief executive John Varley.
Chief Financial Officer Chris Lucas said the final net write-down of £1.64 billion had three components: £1.4 billion on super-senior exposures: £800 million against other credit exposures; and a positive effect of £600 million, as the same spread that caused write-downs caused a "write up" of its own credit.
Altogether, Barclays's impairment charges rose 30% to £2.8 billion. The figure includes the credit-market-related write-downs, loan-loss provisions and credit-card impairments.
Looking ahead the firm Mr. Varley said he expected ""significant opportunities for growth"".
John Varley admitted that he was “disappointed not to acquire” ABN Amro last year. Buying the Dutch bank would roughly doubled its market capitalization, becoming one of the world’s largest banks.
Mr. Varley went on say that failing to win ABN “hasn’t affected our strategy”. However not? It can be argued that the merger would have merely accelerated Barclays’ own growth plans, and that the UK bank was being opportunistic
For 2004 to 2007, the target was in the range of £6.5 billion to £7 billion, or a compound annual growth rate of 10% to 13%. It outperformed both, with an £8.3 billion economic profit and a compound annual growth rate of 16%.
In the next three years, Barclays wants compound annual growth of 5%-10%, to a cumulative total economic profit of between £9.3 billion and £10.6 billion by 2011.
Asked about the modest target for the next three years, Mr. Varley said it reflects the increased cost of doing business: "The cost of capital has risen over the last 12 months," risks have changed and the environment is less benign.
Profits at Barclays Capital, its investment bank arm, rose 5 percent to a record 2.34 billion pounds.
Within its divisions, Barclays said that profits at its UK retail business grew 9pc to £1.28bn, while its commerical bank saw profits rise 5pc to £1.3bn. Profits at its international retail business, excluding its South African arm Absa, reached £246m.
Earnings at Barclaycard jumped 18pc to £540m.
"Barclays delivered a resilient performance in 2007, with profits broadly in line with the record prior year results,"" said chief executive John Varley.
Chief Financial Officer Chris Lucas said the final net write-down of £1.64 billion had three components: £1.4 billion on super-senior exposures: £800 million against other credit exposures; and a positive effect of £600 million, as the same spread that caused write-downs caused a "write up" of its own credit.
Altogether, Barclays's impairment charges rose 30% to £2.8 billion. The figure includes the credit-market-related write-downs, loan-loss provisions and credit-card impairments.
Looking ahead the firm Mr. Varley said he expected ""significant opportunities for growth"".
John Varley admitted that he was “disappointed not to acquire” ABN Amro last year. Buying the Dutch bank would roughly doubled its market capitalization, becoming one of the world’s largest banks.
Mr. Varley went on say that failing to win ABN “hasn’t affected our strategy”. However not? It can be argued that the merger would have merely accelerated Barclays’ own growth plans, and that the UK bank was being opportunistic
For 2004 to 2007, the target was in the range of £6.5 billion to £7 billion, or a compound annual growth rate of 10% to 13%. It outperformed both, with an £8.3 billion economic profit and a compound annual growth rate of 16%.
In the next three years, Barclays wants compound annual growth of 5%-10%, to a cumulative total economic profit of between £9.3 billion and £10.6 billion by 2011.
Asked about the modest target for the next three years, Mr. Varley said it reflects the increased cost of doing business: "The cost of capital has risen over the last 12 months," risks have changed and the environment is less benign.
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