Barclays buy-back takes total to pounds 1bn

Barclays said yesterday it was buying back pounds 405m of its own shares, bringing the total pay-backs to shareholders to almost pounds 1bn in the past 18 months.

News of the buy-back of 55 million shares - or 3.5 per cent of the equity - came as Barclays unveiled a 15 per cent rise in half-year profits to pounds 1.29bn and claimed further progress on its stated aim of "managing profits volatility". The shares closed at an all-time high of 872.5p, up 27.5p on the day, as investors welcomed a 21 per cent rise in the interim dividend to 11.5p a share.

Andrew Buxton, Barclays' chairman, said: "We believe the polices put in place over the last few years are now clearly showing their worth. Barclays' results for the first half of 1996 show strong progress across a broad front, with every major business performing in line with or ahead of expectations. The group is now well-placed to develop further and to exploit new opportunities."

Martin Taylor, chief executive, restated his determination to contain the boom-bust cycle previously faced by Barclays. "The business is emerging from a phase when it had been preoccupied with the problems of the past," he said.

Barclays' profits included pounds 73m of exceptional gains on business disposals. Returns in the same period last year were boosted by pounds 241m in similar gains. Operating income rose 6 per cent to pounds 3.8bn, while operating expenses dipped by 2 per cent. Bad debt provisions fell 32 per cent to pounds 148m.

In the UK, personal banking contributed pounds 363m to group profits with a further pounds 382m from business banking. Mr Taylor said that despite competition in the UK market, customer retention and growth rates continued. Barclaycard continued to strengthen, despite cut-price competition from the US.

Some 1,600 UK banking jobs were lost in the first six months of the year, with Barclays predicting several hundred more to go by the year-end.

BZW, whose investment banking and asset management arms now report separately, contributed a combined pounds 177m to group profits.

Mr Buxton said BZW was not prepared to be part of a rising wages spiral now engulfing parts of the financial sector, butstressed: "We are not against paying for high achievement. If staff can produce good results, then they should be [rewarded]."

Barclays' metal-trading assets declined from pounds 991m in 1995 to pounds 665m in the first six months of this year. Mr Taylor admitted to "mediocre" metals trading in the first half of 1996. But in a reference to the pounds 1.2bn losses incurred by Japan's Sumitomo Corporation, he added: "There have been lower profits, but we are not taking a copper bath."

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