Barclays 4th quarter profit 8 times larger than year-ago due to asset management unit sale

Barclays Q4 profit soars eight-fold on unit sale

LONDON — Barclays PLC on Tuesday reported a fourth quarter profit of 6.9 billion pounds ($10.8 billion), more than eight times larger than a year earlier, due to gains on the sale of its Global Investors unit to a private equity company.

The result compared to a net profit of 824 million pounds a year earlier and boosted the full-year profit to 9.4 billion pounds, more than double the previous year’s 4.4 billion pounds.

The fourth-quarter surge reflected a pretax gain of 5.3 billion pounds from the sale of Barclays Global Investors to BlackRock Inc.

The sale and a revenue boost from the acquisition of Lehman Brothers U.S. operations in September 2008 compensated for a difficult year in the bank’s traditional retail operations. Full year profit from continuing operations fell from 3.8 billion pounds in 2008 to 2.6 billion pounds last year.

Income was up 34 percent to 31 billion pounds, the bank said.

Barclays’ shares were up 8.7 percent at 299 pence in morning trading on the London Stock Exchange.

“With or without the sale of BGI, the figures are extremely impressive,” said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

“As was trailed in previous trading updates, the performance of Barclays Capital was a core contributor to the profit numbers, whilst the impairment levels appear to be under control.”

Barclays CEO John Varley and Group President Robert E. Diamond both declined bonuses for a second year. Bonuses for other senior executives and the Barclays Capital Executive Committee will be paid in full “over a three-year period, subject to clawback,” the bank said.

Chairman Marcus Agius said Barclays boosted lending by 35 billion pounds in 2009, more than tripling its pledge in April to increase lending by 11 billion pounds.

“We believe that when the behavior of banks is assessed by their stakeholders to see whether we have genuinely learnt from the experiences of the last years, we will be judged mostly by how we conduct our business and, in particular today, by how we lend and how we pay,” Agius said.

Barclays said impairment levels in the second half of 2009 were 23 percent, an improvement it didn’t expect to match in the current year. “Whilst we expect 2010 impairment levels to rise in certain books of business, particularly in our commercial lending portfolios, our planning assumption is for a moderate decline in impairment,” it said.

Barclays Capital, beefed up through the acquisition of Lehman Brothers’ business in the United States in September 2008, reported pretax profit of 2.5 billion pounds, up 89 percent from a year earlier.

But Barclays’ retail operations suffered from the lingering recession: pretax profit in the United Kingdom was down 55 percent, Barclays Commercial Bank profit fell 41 percent, Global Retail Banking profit was down 48 percent and Barclaycard net fell by 4 percent.