Barclays profits soar

The blue-chip banking giant said profits rose 22 per cent to 3bn on an underlying basis in the first six months of 2010, with gains on the value of its own debt stripped out.

Its figures come after bad debt charges plunged 32 per cent and as its investment banking arm shrugged off tougher market conditions to report profits of 2.5bn.

The bank set aside another 1.7bn in bonuses for staff across the business, or 1.4bn excluding money deferred from previous years, which is 18 per cent higher than a year earlier.

Its pay-to-income ratio was 42 per cent in the Barclays Capital investment business, although it said on an underlying basis the ratio fell slightly year on year.

Barclays also said salaries across the business were 29 per cent higher than a year ago.

Its results keep up the momentum of a strong first half for UK banks as the sector makes a strong recovery from the financial crisis. Yesterday, Lloyds Banking Group returned to the black with pre-tax profits of 1.6bn.

But the profits haul is likely to stoke anger over lending levels to businesses, as banks come under attack for failing to ease the flow of credit.

Barclays joined peers in refuting claims that they are making it harder to borrow, saying it lent 18bn more to households and businesses in the UK.

But on a net basis - stripping out repayments - lending to businesses with turnover of up to 5m rose only slightly since the end of 2009 and remained flat for medium-sized firms in a sign that companies continue to pay back at a faster rate than they are borrowing.