Page last updated at 15:34 GMT, Monday, 9 February 2009

Barclays makes profit of 6.1bn

Barclays logo
Barclays' share price has fallen more than 80% in the past 12 months

Barclays Bank has reported profits before tax of 6.08bn ($9bn) for the full year of 2008, down 14% on its profits taken in 2007.

Chairman Marcus Agius said the bank had been "solidly profitable despite strong headwinds" experienced during the year.

The bank's charges on bad debt, including US sub-prime mortgages, almost doubled to 5.4bn.

The bank also announced that it would not pay any bonuses to executive directors for 2008.

"For 2009 and beyond, we are reviewing our compensation policies and practices to ensure that they evolve appropriately," said chief executive John Varley.

Banks, particularly those that have accepted taxpayer money, have come under increasing pressure not to pay big bonuses.

Indeed, Prime Minister Gordon Brown said on Monday that there should be "no rewards for failure."

Mixed picture


Barclays' profits included 2.41bn of gains from acquisitions, mainly from its takeover of the North American operations of Lehman Brothers, the failed US bank.

Profits from retail banking were up 7%, from 1.28bn in 2007 to 1.37bn.

Those from the wealth management division of the bank - Barclays Wealth - more than doubled, from 307m to 671m.

However, profits at the bank's commercial arm were down by 7%, from 1.36bn to 1.27bn.

The bank said lending to both retail and commercial customers increased on the previous year.

Joint letter

Last month, the bank was so concerned about the fall in its share price - sparked by worries over the bank's financial strength - that Mr Agius and Mr Varley published an open letter to reassure investors of the bank's financial strength.

Investors believe that the prospects for Barclays are pretty dire
Robert Peston, BBC business editor

They said the bank was well funded and would not be seeking any financial support from the UK government, and added that Barclays' 2008 profit would be "well ahead" of market forecasts.

The letter caused a bounce in the bank's share price, but it was short-lived.

Despite the letter, the bank's credit rating was downgraded by agency Moody's, which said it expected "significant further losses" on credit-related write-downs.

Moody's cut the bank's financial strength rating from B to C and also cut its long-term debt rating.

This put further downward pressure on the bank's share price.

Barclays' shares have fallen more than 80% over the past 12 months.

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