Barclays stumbles on bad debts

LONDON, England (CNN) -- Barclays, Britain's fourth-largest bank, saw its stock drop on Thursday after saying profit fell because it was forced to set aside more money for bad debts.

Its stock, which has fallen about 15 percent this year, slid 4.8 percent to 466 pence in early London trading.

Barclays (BARC) said on net income declined 5.6 percent to £1.23 billion ($1.9 billion), or 18.5 pence a share, in the first six months of this year, from £1.31 billion, or 19.6 pence a share, in the same period a year ago.

The bank's bad debts rose 43 percent to £713 million, largely due to the economic problems of debt-ridden Argentina. Barclays had a £104 million bad debt charge in Argentina in the first half, and its balance sheet also suffered from its decision last year to close down its life funds.

At the pretax level, Barclays profits fell to £1.749 billion in the six months to June 30, down from £1.862 billion a year earlier. Analysts polled by Reuters had forecast profits between £1.673 billion and £1.9 billion.

"Our performance in the first half of 2002 has not met our own high standards, largely as a result of two specific factors -- the performance of the closed life funds and the continued deterioration of markets in Argentina,'' Barclays said in a statement.