Bad Debt Weighs On Barclays Earnings

JANE WARDELL

LONDON (AP) — Banking group Barclays PLC on Tuesday reported strong earnings in its investment banking unit and announced the restart of dividend payments, but also warned that the bad debts weighing on its profits have not yet peaked.

Barclays, Britain's biggest bank and one of the few to rebuff a taxpayer-funded bailout, said net profit fell 29 percent in the first nine months of the year to 2.73 billion pounds ($4.55 billion), down from 3.83 billion pounds a year ago.

The decline was largely due to a 65 percent surge in impairment charges — write-offs on the value of assets — to 6.21 billion pounds as economies remained fragile and unemployment rose.

Finance Director Chris Lucas said the bank now expects charges for the full year to be at the lower end of its previously forecast range of 9-9.6 billion pounds

Lucas acknowledged that charges were likely to worsen again due to a seasonal uptick in the final quarter. He added that it was too early to say whether they would increase further in the first quarter of 2010, although there were some positive trends in the key U.S. employment and housing markets.