Barclays’ profits driven by Lehman Brothers

It is expected that Barclays will publish its first-quarter profits this week. Many are interested in results as they are supposed to include information regarding the increasing price of the company shares. 

There are forecasts that the bank will report profits of about ?1.2 billion, and that is with consideration of impairment charges of over ?2.2 billion. 

The profits of the bank have been driven as company’s investment-banking operation Barclays Capital has observed large benefits from acquisition of the Wall Street operation of Lehman Brothers. 

The positive outcomes of the announcement could help avoid seeking government help at the height of the financial crisis. 

Nonetheless, chief executive John Varley is expected to caution investors that although the company is making large profits right now, it is absorbing rising impairments from its exposure to the UK and other economies including Spain and South Africa. Total impairments this year, he said, could approach ?10 billion, nearly double the amount announced last year. 

Since the beginning of the year, Barclays’ share prices have increased from 47p to 279p, valuing the bank at ?23.4 billion.