British bank Barclays, which is locked in a bidding war for Dutch bank ABN Amro, has reported a healthy profits increase and falling bad debts during the first half of 2007.
Barclays is battling a European consortium led by the Royal Bank of Scotland for control of ABN Amro. But recent stock market falls have eroded the value of Barclays' bid which is mostly in shares - in contrast with the RBS bid which is mainly in cash.
Barclays' pre-tax profits climbed 11.6% to £4.1 billion in the six months to June 30. Bad debts, or loans that have been written off, sank 8.9% to £959m, while revenue advanced nearly 8.5% to £12.15 billion.
Barclays also said it had refunded £87m in settlement payments to UK customers who claimed they had been overcharged for overdraft fees.
Group chief executive John Varley said he was 'confident' the bank's bid for ABN Amro would succeed, even though the value of its mostly-shares offer has been reduced by recent falls in the Barclays share price.
Earlier this month, Barclays called in financial firepower from state-linked China Development Bank and Singapore investment firm Temasek Holdings to boost its ABN bid. It also sweetened its €67.5 billion offer by including a cash element as part of a revised informal bid.
The RBS consortium, which also comprises the Dutch-Belgian group Fortis and Banco Santander of Spain, has formally offered €71.1 billion, which is 93% in cash.
ABN Amro withdrew its backing for a previous bid from Barclays late last month, saying it would recommend neither of two offers.
