Barclays Plc (BARC), Britain’s second- largest lender by assets, had a good start to 2012, lifted by revenue at its investment bank, Chief Executive Officer Robert Diamond said.
“We are encouraged by the start to the year,” Diamond said in a speech at a Morgan Stanley conference in London published on the bank’s website today. “Corporate and investment banking has seen a pleasing increase in volumes both compared to the fourth quarter and the first quarter last year.”
A reduction in available credit during the second half of the year was “eased” by the European Central Bank’s provision of three-year loans to lenders, Diamond said at the conference that included CEOs from other U.K. banks. Barclays, based in London, said earlier this month it took 8.2 billion euros ($11 billion) of the cheap loans for its units in Spain and Portugal.
“Our retail businesses are also seeing a good start to the year,” Diamond said.
Barclays’s revenue at its investment bank fell 48 percent to 1.82 billion pounds ($2.9 billion) in the fourth quarter as Europe’s debt crisis and tougher regulation eroded earnings, the bank said last month. Net income for 2011 dropped 16 percent to 3 billion pounds from a year earlier.
The lender rose 1.5 percent to 251.35 pence in London trading, valuing the company at 31 billion pounds.
Diamond said the bank’s capital position will remain “rock solid” under Basel III rules as the bank sells legacy assets and manages other risks.
Separately, Standard Chartered Plc (STAN) began 2012 “strongly, with very good momentum,” Finance Director Richard Meddings said in a speech at the conference, according to a transcript. The lender expects growth in Asia to drop to 6.5 percent in 2012 from 7.3 percent in 2011, he said.
The bank won’t achieve its “mid teens” return on equity target measure of profitability this year because of increased regulation, Meddings said.
HSBC Holdings Plc (HSBA) Chairman Douglas Flint said banks face challenges in U.K. government policy relating to lending and capital at the conference
“There are clear inconsistencies in the multiple policy objectives that we’re now having to grapple with,” Flint said in his speech. “We want stability as well as growth. We promote growth at the same time we promote fiscal austerity. We have been told to lend more and at the same time to grow our capital both in absolute and ratio terms.”
-- Editors: Jon Menon, Steve Bailey
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