Barclays eyes growth outside the UK as it posts £2.4bn profit

Barclays, Britain's third largest bank, yesterday moved to distance itself from speculation that it may bid for Abbey National, as its deputy chief executive said the bank had never been and would never be "crassly opportunistic or speculative in corporate activity".

Barclays, Britain's third largest bank, yesterday moved to distance itself from speculation that it may bid for Abbey National, as its deputy chief executive said the bank had never been and would never be "crassly opportunistic or speculative in corporate activity".

Announcing bumper first half profits of £2.4bn - up more than 23 per cent on the same period last year - John Varley dodged making any direct comment on Abbey, instead choosing to detail elaborately the bank's attitude towards acquisitions.

Speaking to press and analysts, he said: "I believe you know us well enough not to think of us as reckless throwers of darts at a corporate development dartboard.

"We see [mergers and acquisitions] as the servant of strategy, not the master of it. It's a useful way to accelerate strategy execution if the asset fits with our strategy, and if the price is right - that is, the transaction passes our value screens. We have never been, nor will we become, crassly opportunistic or speculative in our corporate development activity."

Mr Varley added that while the group would always remain open to the possibility of making further acquisitions if they were the right "fit",the group's principal strategy was to concentrate on growing organically. Depending on acquisitions for growth was a "dangerous" strategy to follow, he added.

Mr Varley said the bank's impressive first-half profits were driven principally by strong growth in the group's investment banking division Barclays Capital, its asset management arm Barclays Global Investors (BGI), and in its private client arm. Barclays Capital's earnings increased 37 per cent over the period, while BGI profits were up by 73 per cent.

The group said it had also made strong progress in its UK consumer lending division, led by Barclaycard. Profits in the overall UK business rose 6 per cent. Barclays also unveiled an increase in the interim dividend of 17 per cent.

Naguib Kheraj, the group finance director, said he remained optimistic over the outlook for the coming year, saying the group was well diversified globally so as not to become overly concerned by threats such as rising interest rates in the UK.

But Mr Varley said the group wanted to continue to expand outside the UK. "We earn too little outside the United Kingdom. We intend to change this. Our income generation outside the home market has expanded strongly in absolute terms, but because our UK profits have been growing strongly, the mix has not shifted much.

"About 20 per cent of our income - the average of the last three years - has come from outside the UK, and I would like to see that percentage grow. The overwhelming evidence of stock markets is that income diversity is valued greatly," he said.