The profits were powered by a larger-than-expected fall in bad debt provisions to pounds 358m in the six months to 30 June, compared with pounds 997m last time. There was also a one-off pounds 87m profit from the sale of Barlcays' Australian retail and US factoring operations.
The United States Transition division, which is winding down mortgage and lending, cut its losses from pounds 301m to pounds 48m.
This helped to compensate for a fall in profits at BZW, the investment banking arm, which went from pounds 254m to pounds 194m. David Band, BZW's chief executive, said these were satisfactory results considering the turmoil in the bond and equity markets this spring, and that fees and commission rose by a fifth.
Mr Taylor said a fundamental rebuilding of Barclays had only just started. The recovery enabled the bank to increase the half-year dividend by 23 per cent, and the group's capital strength improved, raising the key tier one capital ratio to 7 per cent and taking the total risk-asset ratio to 11.1 per cent.
Mr Taylor said he would turn down new lending if it did not measure up to risk measurements. 'We are working on new techniques in general provisioning practice to measure the credit risks inherent in various parts of the lending book. The introduction of this new approach is complex, however, and will not be completed until the 1995 accounts.'
Pre-tax profits at Barclays Financial Services fell from pounds 90m to pounds 38m against a background of falling stock markets and lower sales. Following recent criticism by the Securities and Investments Board, Barclays Life has increased its level of provisions, first raised in 1993, for the costs of a review of its life and pensions business.
The life division has not divulged the provision against possible wrongful personal pension transfer business.
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