Barclays defies odds for record profits

27 November 2007

Barclays is set to announce record-breaking profits despite the crisis in the banking industry and the bank's decision to refund overdraft penalty fees to its customers.

The bank expects to make gross profits of $14.55 billion this year, topping last year's unprecedented pre-tax profits of £14.07 billion.

Although Barclays' shares have fallen in recent months, overall the bank said it had achieved successful growth in both retail and commercial banking.

The profits come despite a $180 million bill for refunding customers who had been charged for exceeding their overdraft limit in the first half of this year.

Barclays Capital investment banking branch conceded that it had been affected by the credit crunch, but had suffered smaller losses in the sub-prime mortgage market than analysts had predicted.

Following this news, Barclays has jumped to the top of the FTSE 100 leaders board with a three per cent increase on stocks.

Alex Potter of Collins Stewart said: "UK retail and commercial businesses both saw strong income growth with the tailwind of higher rates clearly helping", but added that doubts over Barclays Capital will only be dispelled by the publication of the bank's full results for 2007 in February.

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