Barclays' chief executive has said that the bank has built a solid platform for growth in 2005 having reported a 20% per cent jump in profit to a record GBP4.6 billion last year.
In particular, Britain’s third-biggest bank was boosted by the strong performance of its investment banking unit. Debt-focused Barclays Capital posted a 25% rise in profits and the group stated that the unit’s increasingly diverse business portfolio, both by product and geography, would ensure continued success this year.
The company’s credit card arm Barclaycard also reported gains. The unit saw profit rise by 5% to GBP801 million with higher volumes more than offsetting margin pressure and the impact of considerable investment in both the UK and the international card businesses.
However, Barclays shares have fallen slightly with investors said to be concerned about rising costs at the bank. The group has spent heavily on its UK retail bank, yet this side of the business showed a 1% fall in profits to GBP1.13 billion. London-based Barclays said that expenses had risen 15% in 2004, faster than its 12% rise in overall revenue.
Barclays was nevertheless upbeat regarding its performance. John Varley, who took over as group chief executive in September last year, said, Barclays had a record year in 2004, demonstrating the strength and flexibility of its strategy. A combination of good returns from prior investment and the continued strong pace of investment during 2004 means that we are in good shape to deliver profitable growth in the future.