Barclays announces £4.6bn profits

Click to follow
The Independent Online

Barclays today unveiled profits of £4.6 billion as part of the first slice of a £30 billion haul expected from the UK's five biggest banking groups.

The record annual performance from Barclays was 20 per cent higher than 2003 and included profits of £2.47 billion from its UK banking division.

In the coming days, HSBC, Lloyds TSB, NatWest owner Royal Bank of Scotland owner and HBOS are expected to take the sector's total profits for 2004 towards £30 billion - equivalent to £1,000 a second.

Much of the 9 per cent improvement in UK profits was achieved in business banking, where annual earnings lifted by 19 per cent to £1.35 billion.

This was offset by a weaker result in the retail division - an area Barclays said it needed to improve after profits fell 1 per cent to £1.13 billion.

Barclays forecast a better showing in 2005, following its investment in more front-line staff, as well as better technology and infrastructure.

The company, which has more than 2,000 UK branches serving 10.7 million current account customers and 10.6 million savers, blamed the weaker UK retail showing on margins pressure on its mortgage business.

Elsewhere in the group, Barclaycard profits rose by 5 per cent to £801 million - a showing described as "more muted" than previous years following a series of interest rate rises and a drive to grow the customer base.

In the wealth management division, which includes recently-acquired stockbroker Gerrard, earnings rose by 57 per cent to £451 million.

Chief executive John Varley said he was confident of further growth across the group: "We take nothing for granted, but 2005 should be a year in which we can move forward confidently."

Although Barclays' profits appear large in comparison to many other UK firms, they are likely to be dwarfed by those of NatWest owner Royal Bank of Scotland which is expected to unveil a surplus of £7.93 billion.

HSBC - the biggest UK bank by market value - is set to receive the greatest flak for a profits haul that analysts predict will total 17.5 billion US dollars (£9.4 billion).

Outrage among consumer groups will be fuelled further by the profits of Halifax owner HBOS and Lloyds TSB which are expected to reach £4.68 billion and £3.33 billion respectively.

Such forecasts have already sparked anger and stoked calls for the Government to slap a windfall tax on banks.

Eddy Weatherill, of the Independent Banking Advisory Service, said: "We want them to make fair profits, but the inference from the whole industry making more profit every year even when the banking regulators are snapping at their heels points to an industry going hell for leather to cane the customer."