Barclays, Britain's third-biggest bank, said its investment bank unit made a £1.3 billion sterling writedown due to its exposure to credit market problems in the four months to the end of October.
In a surprise trading update today, Barclays Capital announced a writedown of £500m for the July-September quarter and a further £800m writedown for October. The writedown was less than many estimates of Barclays' exposure to problems.
BarCap's net income and pre-tax profit for the 10 months to the end of October was ahead of a year before at £1.9 billion after writedowns, the bank said.
'Today's extensive disclosure demonstrates the strength and resilience of our performance during the year and in particular during the turbulent month of October,' Barclays CEO John Varley said in a statement.
Barclays shares have fallen 15% in the last month on fears it faces big losses due to its exposure to a deepening credit market crunch, sparked by a US sub-prime mortgage crisis.
Last week it denied speculation it was about to announce a $10 billion writedown and that its top management would quit.
Rivals including Citigroup, Merrill Lynch and UBS have announced almost $50 billion of losses and writedowns in the past month after a meltdown in mortgage securities and troubles in the US mortgage backed collateralised debt obligations market.
BarCap said the October writedown reflected the impact of rating agency downgrades on a broad range of CDOs and the subsequent market downturn.
