Barclays Announces Financial Year 2008 Results

"In a very difficult economic environment in 2008, Barclays has steered a course that has enabled us to be solidly profitable despite strong headwinds," says Marcus Agius, chairman. "We are well positioned to maintain Barclays competitive strengths through the undoubted

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“In a very difficult economic environment in 2008, Barclays has steered a course that has enabled us to be solidly profitable despite strong headwinds,” says Marcus Agius, chairman. “We are well positioned to maintain Barclays competitive strengths through the undoubted challenges that will come in 2009 and beyond.”

“We thank our customers and clients for the business they directed to Barclays in 2008,” says John Varley, chief executive. “High levels of activity on their behalf have enabled us to report substantial profit generation in difficult conditions. We benefited from a number of gains on acquisitions and disposals. These contributed to headline profit, and to capital, but the main driver of our results was a solid operating profit performance and record income generation. We commit to reducing the size of our balance sheet over time, and we will maintain our capital ratios at levels that are well ahead of regulatory requirements. We intend to recommence dividend payments during the second half of 2009.”

Group profit before tax was 6,077 million, down 14% on 2007. Profit included:

– Gains on acquisitions of 2,406 million, including 2,262 million relating to Lehman Brothers North American business- Profit on disposal of the closed life assurance book of 326 million- Gains on Visa IPO and sales of shares in MasterCard of 291 million- Gross credit market losses and impairment of 8,053 million- Gains on own credit of 1,663 million

Global Retail and Commercial Banking profit before tax increased 6% to 4,367 million

– UK lending increased to both retail and corporate customers- Strengthened international presence in Barclaycard, Western Europe and Emerging Markets

Investment Banking and Investment Management profit before tax was 2,568 million, down 24% reflecting significant gains on acquisition and disposal and the impact of credit market dislocation

– Barclays Capital’s strategy of diversification by geography and business accelerated through the acquisition of Lehman Brothers North American business- There were strong net new asset flows into Barclays Wealth and Barclays Global Investors despite declines in equity markets

Group balance sheet growth driven by over 900 billion derivative gross-up, growth in loans and advances of 124 billion and impact of foreign exchange rates on non-Sterling assets

Risk weighted assets increased 22% (79 billion) to 433 billion reflecting:

– the significant depreciation in Sterling relative to both the US Dollar and the Euro- procyclicality: macroeconomic indicators generally, and corporate credit conditions specifically, deteriorated towards the end of 2008 leading to ratings declines

Capital ratios were strengthened through the raising of 13.6 billion of Tier 1 capital. The year-end pro forma Tier 1 capital ratio was 9.7% and the pro forma Equity Tier 1 ratio was 6.7%

Barclays targets reduced adjusted gross leverage and capital ratios significantly ahead of regulatory requirements.

To download the report please click here.

D.C.

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