British bank Barclays has reported a 33% slump in its first-half profits after suffering write-downs of £2.8 billion in the value of investments as a result of the credit crunch.
The group posted £2.75 billion of pre-tax profits for the six months to June 30. This came after it racked up another £1.1 billion of credit crunch impairments in Q2 on top of the £1.7 billion reported during the first three months.
Barclays chief executive John Varley said the group had experienced 'significant' write-downs and that profits decline was 'acutely disappointing'.
Excluding sub-prime charges, the bank's bad debt charges increased 40% during the six months to £2.45 billion. While write-offs among its UK mortgage book remained 'very low', and increased slightly at the UK's retail banking arm, Barclays said it suffered 'significant growth' in impairment charges relating to international retail and commercial banking businesses.
Barclays' investment banking arm appeared to be among the worst hit areas thanks to the credit crunch write downs. The division saw pre-tax profits slump 68% to £524m.
Mr Varley said: 'The conditions in the market that we have seen over the course of the last 12 months are as difficult as we have experienced in many years.' He added that market conditions over the foreseeable future would remain tough.
