Profits in Barclays Banks dropped by 4 per cent to £2 billion sterling, according to figures for the six months to June 30th released this morning.
Blaming provisions for bad debts, particularly over a £104 million loan to Argentina and the decline in life assurance business as markets fell, the bank said the two situations had led to a 8 per cent operating profit falling to a 4 per cent loss.
Overall, provisions for bad debts rose 43 per cent to £713 million from £498 million in 2001. This includes the Argentina loan and £609 million of other provisions.
Profit before tax fell 6 per cent to £1.7 billion compared with the first half of 2001 but increased 9 per cent relative to the second half of 2001. Operating expenses rose by 3 per cent to £3bn million.
The company said results reflect the impact of movements in the FTSE 100 index, which has declined by 17 per cent from 30th June 2001 to 30th June 2002.
The bank was cautiously optimistic about outlook, however, and forecast some improvement in the economy over the next six months that would bolster business.