Barclay's Bites It With New Math
Barclays Plc, the U.K.'s #3 bank, said 2nd half profit fell 21% on asset writedowns and a drop in revenue from fixed-income trading.
The securities unit had $3.1 billion in net writedowns last year related to assets such as CDO collateralized debt obligations and loans for LBO leveraged buyouts.
The writedown is a 26% increase on the charge reported in November for the first 10 months as bad debts rose 67%.
CEO John Varley said the U.K. and U.S. economies are slowing, adding pressure to banks already facing bad consumer loans and a slower housing market.
Finance Director Chris Lucas: "If we had something that we felt significantly changed the comments that we've made about the outlook...
and something that had a significant effect upon the market position of our equity we would make a statement. We do not feel we have to make one."
The Nattering One makes a statement on Barclays new math: Pretax profit fell 14% to 2.96 billion pounds,
declining 30% to 675 million pounds at Barclays Capital, the most profitable division in the first half.
There was an 846 million pound impairment charge at the Barclays Capital investment-banking unit.
Barclays Capital's revenue was lifted by about 1 billion pounds in one-time items,
including a 514 million-pound reserve release and gains on private equity, structured capital markets deals and sales of investments in Asia.
Bear Stearns Cos. analyst Robert Sage: The boosts "were unexpected and could be perceived as lower quality."
In other words, ex one time items, the most profitable division actually LOST 325 million pounds.
Lloyds TSB Group Plc, the U.K.'s No. 1 provider of unsecured loans, announces full-year results on Feb. 22.
Royal Bank of Scotland Group Plc, the second-biggest U.K. bank, reports on Feb. 28, followed by HSBC Holdings Plc, the biggest bank, on March 3.
The securities unit had $3.1 billion in net writedowns last year related to assets such as CDO collateralized debt obligations and loans for LBO leveraged buyouts.
The writedown is a 26% increase on the charge reported in November for the first 10 months as bad debts rose 67%.
CEO John Varley said the U.K. and U.S. economies are slowing, adding pressure to banks already facing bad consumer loans and a slower housing market.
Finance Director Chris Lucas: "If we had something that we felt significantly changed the comments that we've made about the outlook...
and something that had a significant effect upon the market position of our equity we would make a statement. We do not feel we have to make one."
The Nattering One makes a statement on Barclays new math: Pretax profit fell 14% to 2.96 billion pounds,
declining 30% to 675 million pounds at Barclays Capital, the most profitable division in the first half.
There was an 846 million pound impairment charge at the Barclays Capital investment-banking unit.
Barclays Capital's revenue was lifted by about 1 billion pounds in one-time items,
including a 514 million-pound reserve release and gains on private equity, structured capital markets deals and sales of investments in Asia.
Bear Stearns Cos. analyst Robert Sage: The boosts "were unexpected and could be perceived as lower quality."
In other words, ex one time items, the most profitable division actually LOST 325 million pounds.
Lloyds TSB Group Plc, the U.K.'s No. 1 provider of unsecured loans, announces full-year results on Feb. 22.
Royal Bank of Scotland Group Plc, the second-biggest U.K. bank, reports on Feb. 28, followed by HSBC Holdings Plc, the biggest bank, on March 3.
Comments