Barclays has reported a sharp rise in pre-tax profits in 1999 - up 29.8% to £2.46bn ($3.94bn).

The UK's fourth-biggest bank also set a cost-cutting target of £1bn over three years.

Matthew Barrett, Barclays' chief executive who joined the company last October, said the group had "more to do" to cut costs and bring further improvements to profitability.

There was no announcement of job losses - following a year in which the bank has shed 7,500 staff - but Barclays indicated that it needed to become more efficient.

It said it had to rethink the way it did business and accelerate the pace of change, aggressively seeking improved productivity.

However, it also said staff that were prepared to face the changes and learn new skills would have a future with the bank, although staff numbers would continue to decline.

Profitable

Barclays also committed itself to improving its internet business, and said it planned to double the number of internet customers to one million by the end of this year.

The pre-tax profit of £2.46bn for 1999 compared with £1.89bn in the previous year and was well above analysts' expectations.

Earnings per share rose to 117.5 pence from 87.2 pence.

The total dividend was increased by 16% to 50 pence a share.

Earnings per share based on operating profit were 142.8 pence, up 59%.

Strong growth in profits at Barclays' High Street retail banking operations helped fuel last year's improvement, while a return to stable global financial markets brought the Barclays Capital investment arm firmly back into profit.

Reaction

Commerzbank analyst James Alexander said: "Barclays is now the benchmark of the top banks."

"There's Lloyds with a wishy-washy internet strategy and Royal Bank of Scotland-NatWest with years of serious integration issues to face, while Barclays looks like it's heading in the right direction on strategy and with what looks like a good chief executive."

Fox Pitt Kelton analyst Jon Kirk said Barclays performance on margins and market share was solid.

He said: "Barclays seems to be balancing it better than Lloyds and Alliance & Leicester."

Lloyds' share price has fallen 11% since its results were released last Friday because of disappointment about its internet strategy and nagging worries about new entrants squeezing margins and market share at the established banks.