Barclays has disclosed a £1 billion write-down, as a result of the credit crisis, reports Banking Times.
The bank’s investment division, Barclays Capital, absorbed a £1 billion write down during the first quarter as credit market conditions worsened. However, the unit remained profitable overall.
Profit for the first quarter declined year-on-year, largely as a result of tougher market conditions in March but the group’s U.K. retail business recorded strong profit growth.
Both Barclays’ commercial banking and mortgage business also performed well during the first three months of the year. The bank says it expects that by the end of June, its key Tier One capital ratio will be slightly below its 5.1% level of last December.
Banks are currently under pressure from regulators to raise their capital to risk ratios and
Barclays could follow Royal Bank of Scotland, HBOS and
Bradford & Bingley in a rights issue. According to the group’s chief executive, John Varley, a number of options are available to improve the bank’s capital position and at this stage, none are being ruled out.
