Barclays PLC will report pretax profits for last year in excess of £5.3 billion (US$7.3 billion) despite absorbing £8 billion in write-downs, the bank said yesterday
The bank, whose shares fell sharply last week, said it would report full-year results on Feb. 9, earlier than planned, in an effort to allay market concerns.
“These figures demonstrate that, although we have been heavily impacted by the credit crunch, our income generation was at a record level in 2008 and has enabled us to withstand this impact and still produce strong profits,” Barclays chairman Marcus Agius and group chief executive John Varley said in a statement to the London Stock Exchange.
They said the company did not need more funding from investors or a government bailout.
The bank said customer and client activity levels have been high so far this month.
“As a result, we have had a good start to 2009. In particular, the operating performance of Barclays Capital, benefiting as it is from the now completed integration of the Lehman business, has been extremely strong,” Varley and Agius said.
Barclays shares took a beating last week, falling from £1.421 on Jan. 16 to £0.512 on Friday, although the company previously had forecast full-year profits to be in line with today’s statement and consistently had said it did not need government help.
Barclays nevertheless said it expected to benefit from the Treasury’s plan to offer insurance against losses on certain assets.
It said it was discussing with authorities “the terms on which, and the extent to which, we would wish to insure certain assets on our balance sheet through the UK Treasury’s asset protection scheme.”
In other developments, French banking giant BNP Paribas said yesterday that it expected net profit of 3 billion euros (US$3.89 billion) for last year and was seeking to raise fresh capital of 5.1 billion euros.
In 2007, the group posted a net profit of 7.8 billion euros.
Since then, the global financial crisis has ravaged the banks and BNP said it expected a fourth quarter loss of 1.4 billion euros, its first time in the red for some 10 years. Previously published figures showed the bank’s third quarter net profit plunged 55 percent from a year earlier to 901 million euros.
BNP said the fourth quarter loss reflected “exceptionally violent movements on the capital markets, especially the stock markets,” which resulted in losses of 2 billion euros at its finance and investment unit.
It said it would seek fresh capital by issuing preference shares under the French government’s second tranche of funding for the financial sector, which would raise its Tier One capital ratio to about 8 percent.
Half of the funds raised would be used to repay earlier government aid.
Capital ratios are a measure of a bank’s overall financial health, setting liabilities against their readily available capital.
BNP’s full results for last year will be published on Feb. 18.