Barclays reveals true extent of writedown

15 November 2007

The UK's third biggest bank has at last revealed that $2.7 billion has been written down due to the US sub-prime mortgage market crash, with the biggest hit being taken in October.

Shares in Barclays were suspended for a time on Friday after it fought to refute claims of more billions in write downs.

Since the true state of its fortunes has been revealed, Barclays' shares have increased by 5.9 per cent after a considerable drop at the end of last week.

Up to the end of the third-quarter at the end of September, Barclays Capital has admitted a loss of £500 million due to US mortgage-backed securities.

According to the Times, Barclays is advancing its trading update in order to stave off negative rumors.

John Varley, Barclays' chief executive, said: "I am well satisfied with our absolute and our relative performance", and confirmed that the bank will not change its dividend policy.

Bob Diamond, president at Barclays Capital, said that the problems caused by the US sub-prime market could take up to two years to resolve.

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