Barclays says sorry as profits rise by 13% to £4.2b

Barclays has announced a 13 per cent increase in adjusted pre-tax profits to £4.2 billion for the first six months of 2012.

Financial results at its investment banking division were healthy with close to 15 per cent adjusted return on average shareholders’ equity.

Barclays announced increases in profits of 15 per cent in retail and business banking and 11 per cent in corporate and investment banking.

However, the banks’ statutory profit before tax fell by 71 per cent to £759 million caused by a charge of£2,945 million for having to account for its own credit. The bank set aside £450 million to cover potential compensation to small and medium-sized businesses mis-sold interest rate hedging products.

In his presentation notes, chairman Marcus Agius said sorry for “the issues that have emerged over recent weeks”. He was referring to the discovery that traders at the bank manipulated Libor, the interbank lending rate.

This led to the bank being fined a record £290 million by US and UK regulators and the resignation of chief executive Bob Diamond and other leading executives.

Mr Agius went on to say: “These remain challenging times for Barclays, as well as the industry, and we are sorry for what has happened because of recent events. I am confident we can and will repair the reputational damage done to our business in their eyes and those of all our stakeholders.”

Barclays also revealed that four current and former senior employees are being investigated by the Financial Services Authority over whether they informed shareholders about the fees they received relating to unspecified deals made in 2008.

The bank achieved a 9.9 per cent return on equity, up from 9.3 per cent in the same period last year but well below Barclays stated target of 13 per cent.

Overall, the results beat analysts’ expectations, which were for profits of around £3.8 billion. Shares in Barclays went up around five per cent to 161.7 pence per share after the financial results were published.