PROFIT at Barclays Capital made up 87 per cent of the banking group’s overall earnings, though much of its £3.4bn profit was due to unexpected one-off items and credit changes.
While pre-tax profit for the half had almost trebled compared to the first half of 2009, this includes a £851m gain on its own credit.
The investment banking division’s first-half underlying revenues fell 32 per cent to £7.12bn, compared to what the firm said was an “exceptionally strong period” in 2009, as trading in bonds, currencies and commodities dried up.
Top line income, a measure of revenue, also fell 38 per cent during the second quarter.
BarCap’s underlying pre-tax profit fell by 25 per cent to £978m in the quarter, although it still rose 32 per cent to £2.55bn for the first half.
Costs at BarCap rose sharply, taking the lion’s share of the group’s £1.6bn bill, after the division invested in infrastructure and spent more complying with the FSA’s deferred payment rules.
BarCap, run by president Bob Diamond, has grown rapidly since snapping up Lehman Brothers operations in September 2008.