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Barclays' profit up, bad loans down

Barclays' profit up, bad loans down
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Good news from Barclays which saw its third quarter profit rise by five percent.

There were gains in retail banking and from its credit card division while it had to set aside less money for bad loans.

By contrast, Barclays’ investment bank suffered a third straight sharp fall in quarterly income.

The British lender said market conditions continue to be “challenging” as the euro zone’s financial problems deepened.

It added that they were likely to remain tough despite improvement since last week’s announcement of plans to solve the crisis.

“There’s no question market conditions this year have been challenging and we’d expect that to continue in some way into next year, given the weaker economic growth we’re seeing,” said Chief Executive Bob Diamond.

Barclays has axed about 3,500 jobs this year, more than the 3,000 cuts that had been earmarked for the year in August, and Diamond said the trend could continue as he fights to revive profitability and slash costs.

September reached 2.4 billion pounds (2.75 billion euros). Stripping out a 2.9 billion pound (3.2 billion euro) gain on the value of its own debt and other one-off items, profit was 1.34 billion pounds (1.53 billion euro), up five percent on the same period in 2010.

Losses on bad debts were one billion pounds (1.14 billion euros) in the third quarter, down 16 percent from a year ago, and have tumbled by a third this year.