London: Barclays met quarterly profit expectations as bad debts fell sharply and investment bank earnings rose but income growth at its BarCap investment banking arm failed to match the lofty levels shown by rivals.
Barclays shares fell 4.6 per cent to 345.3 pence, the biggest UK blue-chip faller, mainly on disappointment at revenue growth in its Barclays Capital investment bank arm, analysts said.
Barclays followed domestic rival Lloyds and other banks in reporting a fall in bad debts as Britain and other economies pull out of recession.
"The improvement that we have seen in impairment reflects the signs of economic recovery now evident in many of the markets in which we operate," said Chief Executive John Varley.
"Barclays Q1 [first quarter] shows reasonable figures, but are not enough to push consensus figures forward in our opinion. In fact, they may be mildly disappointing given the lack of a 'beat' on revenues or profit," said Andrew Lim, analyst at Matrix.
Britain's second biggest bank said yesterday that pretax profit in the three months to the end of March jumped 47 per cent to £1.8 billion (Dh10.14 billion, $2.8 billion) from a revised 1.2 billion a year ago, excluding the profits from BGI, matching the average forecast from four analysts polled by Reuters.
Analysts said the growth was largely due to a drop in bad debts to £1.5 billion from expectations of about £1.8 billion.
BarCap accounted for four-fifths of group profits, as earnings jumped 62 per cent to £1.5 billion.
But its income of £3.8 billion fell well short of some analysts' expectations of near £5 billion, as the bank failed to benefit as much from strong fixed income, currencies and commodities (FICC) business as many of its rivals.
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US and European banks including Goldman Sachs, JPMorgan and Deutsche Bank reported "blowout" quarterly earnings, prompting some analysts to warn in advance of the results that expectations for BarCap had been raised too high.
Credit Suisse shares also fell after it reported modest investment bank growth last week.
