By Lawrence White and Iain Withers
LONDON (Reuters) -Barclays will resume shareholder payouts after beating first-half profit expectations on bumper investment banking fees and the release of cash set aside to cover pandemic-related bad loan charges.
Announcing first-half profits that nearly quadrupled, the British lender said it would pay an interim dividend of 2 pence per share, after the Bank of England in July scrapped its pandemic curbs on payouts.
It also said it would buy back 500 million pounds of its own shares, as it forecast bad loan charges would remain below historical levels due to the improved economic outlook and low default rates on unsecured lending.
Barclays (LON:BARC) reported profit before tax of 5 billion pounds ($6.94 billion) for the six months to June 30, well above the consensus forecast of 4.1 billion pounds from analysts polled by the bank and up from 1.3 billion a year ago.
The results were boosted by the bank releasing 742 million pounds in cash set aside for bad debt charges that have yet to materialise, as government support measures prop up the economy.
Barclays' investment bank has enjoyed a strong run in recent quarters, as volatile markets during the pandemic led to frenzied trading, while companies have raised record amounts through blank-cheque investment funds and stock listings.
Equities fees rose 38% and investment banking fees from advising on deals rose 27% in the first half of the year, Barclays said.
Its fixed income, currencies and commodities (FICC) business meanwhile fell 37% against a strong first half a year ago.
The bank said its costs rose 10%, mainly from expenses associated with cutting its real estate footprint and higher bonuses due to its improved performance.
With the resumption of interim shareholder payouts, Barclays set a positive tone ahead of results from rivals Lloyds (LON:LLOY), NatWest and HSBC over the next week.
($1 = 0.7209 pounds)