UPDATE 3-Barclays profits rise, BarCap misses lofty hopes

*Q1 profit up 47 pct on yr to 1.8 bln stg, meets f/casts

*Shares dip 4 pct, BarCap income falls short -analysts

*BarCap accounts for 81 pct of profit after 62 pct jump

*Bad debts improve to 1.5 bln stg vs 2.3 bln

By Steve Slater

LONDON, April 30 (BestGrowthStock) – Barclays Plc (BARC.L: ) met
quarterly profit expectations as bad debts fell sharply and
investment bank earnings rose but income growth at its BarCap
investment banking arm failed to match the lofty levels shown by
rivals.

Barclays shares fell 4.6 percent to 345.3 pence, the biggest
UK blue-chip faller (.FTSE: ), mainly on disappointment at revenue
growth in its Barclays Capital investment bank arm, analysts
said.

“Barclays Q1 shows reasonable figures, but are not enough to
push consensus figures forward in our opinion. In fact, they may
be mildly disappointing given the lack of a ‘beat’ on revenues
or profit,” said Andrew Lim, analyst at Matrix.

Britain’s second biggest bank said on Friday that pretax
profit in the three months to the end of March jumped 47 percent
to 1.8 billion pounds ($2.8 billion) from a revised 1.2 billion
a year ago, excluding the profits from BGI, matching the average
forecast from four analysts polled by Reuters.

Analysts said the growth was largely due to a drop in bad
debts to 1.5 billion pounds from expectations of about 1.8
billion pounds.

BarCap accounted for four-fifths of group profits, as
earnings jumped 62 percent to 1.5 billion pounds.

But its income of 3.8 billion pounds fell well short of some
analysts’ expectations of near 5 billion pounds, as the bank
failed to benefit as much from strong fixed income, currencies
and commodities (FICC) business as many of its rivals.

U.S. and European banks including Goldman Sachs (GS.N: ),
JPMorgan (JPM.N: ) and Deutsche Bank (DBKGn.DE: ) reported “blowout”
quarterly earnings, prompting some analysts to warn in advance
of the results that expectations for BarCap had been raised too
high.

Credit Suisse (SCGN.VX: ) shares also fell after it reported
modest investment bank growth last week.

BarCap President Jerry del Missier told Reuters the first
quarter performance represented a “baseline” for the business
and said there was upside potential as its expansion picks up
pace this year.

The bank did lower its target for BarCap’s costs/net income
ratio to 60-65 percent from 65-75 percent previously, as its
investment in new businesses slows and revenues rise.

Barclays said trading in April was consistent with the
trends seen during the first quarter.

Barclays followed domestic rival Lloyds (LLOY.L: ) and other
banks in reporting a fall in bad debts as Britain and other
economies pull out of recession.

“The improvement that we have seen in impairment reflects
the signs of economic recovery now evident in many of the
markets in which we operate,” said Chief Executive John Varley.

Stock Market Advice

(Editing by David Cowell and Andrew Callus)

UPDATE 3-Barclays profits rise, BarCap misses lofty hopes