Commercial Property News

Barclays Plc, the UK’s third-largest bank, has reported group pre-tax profit of £3.9 billion for H1 of 2010, up 44% on a year earlier.

Income rose 8%, to £16.6 billion, and impairment provision fell 32%, to just over £3 billion. Net income rose to £2.43 billion in the six months to June 30, from £1.89 billion in the year- earlier period, the  bank said in a statement today. That beat the £2.26 billion median estimate of analysts.

“Against the backdrop of subdued economic and market activity and sovereign debt storm of the second quarter, we have delivered good growth in income and profits,” Chief Executive Officer John Varley said in the statement.

Profit at the Barclays Capital investment banking operation led by Robert Diamond more than tripled to £3.4 billion, helped by a gain in the bank’s own credit. Still, revenue at the unit dropped 32%, the lender said. The bank hired 750 people in Asia and Europe last year to expand its equities and mergers advisory unit and acquired the North American operations of Lehman Brothers Holdings Inc. in 2008.

Barclays Capital contributed about half of pretax profit last year and comprises about three quarters of the bank’s assets. Varley in February said he would like the bank to generate a third of profit from Barclays Capital “over time.”

The bank will invest as much as £1 billion over the next four years to expand its consumer banking operations in the U.K., France, Italy, Spain and Portugal and reduce its reliance on investment banking.

In December, the bank sold its Barclays Global Investors fund management unit to BlackRock Inc. for $15.2 billion to boost capital as it avoided a government bailout. Barclays in September sold $12.3 billion of debt to Protium Finance LP, a fund run by former executives, to reduce losses linked to credit market volatility.

Barclays has gained 1% in the past 12 months, making it the worst-performer in the FTSE 350 Banks Index, which climbed 11% in the period.

HSBC Holdings Plc this week said first-half profit doubled to $6.76 billion as bad debt provisions declined by almost half. HSBC’s investment banking pretax profit fell 11% to $5.63 billion, as revenue dropped 12%. Barclays last month said investment banking revenue in May and June were “softer” because of as mergers, stock and bond sales slowed.

Lloyds Banking Group also announced this week that it has returned to profitability on a combined businesses basis, reporting pre-tax profit of £1.6 billion in the first half of 2010.

The result compares with a £3.9 billion loss in the same period of 2009.

The group saw a strong trading performance against the backdrop of a stabilising economy, reporting “good” revenue growth, lower costs and reduced provision for bad debts.

Total impairments were significantly lower than expected at £6.5 billion, compared with almost £13.4 billion in the first half of 2009.

Lloyds’ banking net interest margin improved to 2.08%, compared to 1.83% second half of 2009, and the group says it remains on track to deliver targeted balance sheet reductions of £200 billion.

In the first six months of the year, the 41% state-owned lender extended a gross £14.9 billion in new mortgages to UK homeowners and committed £23.7 billion in lending to UK businesses.

Looking ahead, Lloyds expects to deliver a strong medium-term performance as the UK economy recovers.

Commenting on the results, group chief executive, J Eric Daniels, says: “Despite the challenging economic environment, the core businesses performed strongly and we continued to see positive momentum across all of the key income statement line items: income, margins, costs and impairments and an extension of the positive business trends established in 2009.”