By Jon Menon, Andrew Macaskill and London
Barclays, Britain's third-largest bank, said first-half profit rose 29 per cent as provisions for bad loans declined.
Net income rose to £2.43 billion ($A4.22 billion) in the six months to June 30, from £1.89 billion in the year-earlier period. That beat the £2.26 billion median estimate of 10 analysts.
''Against the backdrop of subdued economic and market activity and sovereign debt storm of the second quarter, we have delivered good growth in income and profits,'' chief executive officer John Varley said.
Profit at the Barclays Capital investment banking operation more than tripled to £3.4 billion, helped by a gain in the bank's own credit. Still, revenue at the unit dropped 32 per cent, the lender said. The bank hired 750 people in Asia and Europe last year to expand its equities and mergers advisory unit and acquired the North American operations of Lehman Brothers Holdings in 2008.
Barclays Capital contributed about half of pretax profit last year and comprises about three-quarters of the bank's assets. The bank will invest as much as £1 billion over the next four years to expand its consumer banking operations in the UK, France, Italy, Spain and Portugal, and reduce its reliance on investment banking.
Barclays last month said investment banking revenue in May and June was ''softer'' as mergers and stock and bond sales slowed. In December, the bank sold its Barclays Global Investors fund management unit to BlackRock for $US15.2 billion ($A16.6 million) to boost capital as it avoided a government bailout. It also sold $US12.3 billion of debt to Protium Finance.
BLOOMBERG