Barclays Capital, the investment banking arm of British bank Barclays, was profitable in September amid the global credit squeeze, Barclays president Bob Diamond said Friday.
"At Barclays Capital, September profits were substantially ahead of July and August," Diamond said in a trading update. "I continue to expect profitable trading for the rest of 2007," he added.
There had been speculation that Barclays Capital, which specialises in arranging debt finance, had been hit hard by a sharp tightening of credit since August amid a surge in defaults against US sub-prime mortgage loans. Barclays Capital has been Barclays' main growth driver for the past four years. In 2006, the unit's profits jumped by 55 percent to 2.2 billion pounds, accounting for 30 percent of total group profit.
Last week Barclays conceded defeat over its bid to buy Dutch bank ABN Amro. On Wednesday of this week, a European consortium led by Royal Bank of Scotland officially declared victory in the take-over battle for ABN, sealing the biggest takeover in banking history. The consortium won ABN Amro with a mainly cash bid worth 100 billion dollars (71 billion euros).