Barclays: business ‘sound’

The group revealed a 9 per cent increase in total income over the nine months to September 2007, with growth in its mortgage and customer deposits.

However, Barclays was forced to make the early trading statement because of the persistent rumours over the state of its business and potential write downs.

The trading updates followed a tough month for Barclays, which saw its stock price fall to its lowest level since July 2004. It was also forced to write down a total of £1.3 billion of securities related to the troubled US non-conforming market, with £800 million in October alone.

John Varley, group chief executive for Barclays, said: “The diversification of our profits in recent years, together with the investments we have made in businesses both inside and outside the UK, is serving us well in 2007.

"Our performance in the nine months to the end of September was supported by good underlying growth in global retail and commercial banking, and by resilience in investment banking and investment management in the face of turbulent market conditions in the second half.”

Ray Boulger, senior technical manager for John Charcol, said: “Barclays would not have put out such a confident statement unless it stacked up. But the extent to which it will have to take losses to its securitised assets is a matter of conjecture.

"The likelihood is that most banks will end up having to increase their loss provisions. The market is very volatile and it’s very likely we will see more losses reported next year.”

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