Page last updated at 08:40 GMT, Thursday, 15 May 2008 09:40 UK

Barclays in 1bn credit writedown

Barclays Bank
Barclays has not asked its investors to beef up its balance sheet

Barclays has taken a further 1bn writedown on assets and confirmed profits for the first quarter of 2008 will be lower than last year.

Last month, the bank warned that tough trading in its investment bank division Barclays Capital during March would cut group profits for the quarter.

But Barclays did not ask shareholders for additional cash in a rights issue as some of its rivals have done.

Banks are still suffering the credit crisis and are keen to raise capital.

Royal Bank of Scotland, HBOS and Bradford & Bingley have all approached their investors to ask for extra cash to shore up their balance sheet to repair credit-related losses.

Today's statement does little to assuage any concerns regarding the likelihood of a rights issue
Richard Hunter,
Hargreaves Lansdown Stockbrokers

With the Bank of England's latest inflation report painting a gloomy picture for the UK's economic prospects, the banks are also keen to prepare against falling demand for their services.

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said Barclays was keeping its options open.

"Today's statement does little to assuage any concerns regarding the likelihood of a rights issue, with the company insisting on keeping the door ajar," he said.

"It maintains that it will continue to monitor all options and will clearly not be drawn on speculation as to what form this capital injection might take."

Barclays did not disclose the extent of its profits fall in the first quarter, but said that Barclays Capital was profitable "despite the difficult trading conditions".




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