Barclays beats estimates as profits up 5%

Barclays reported Q3 profits rose 5%, beating estimates, despite the sovereign debt crisis hurting investment banking revenues.

Pretax profit, before debt valuation adjustments, in the three months to 30 September rose to £1.3bn from £1.27bn a year earlier, aided by cost cutting measures.

However, revenue at the Barclays Capital investment banking unit fell 15% to £2.25bn over the period. Overall, quarterly revenues were 3% lower at £7bn in the face of "significant economic and market headwinds".

Barclays said in June it would seek to increase revenue by as much as £6.4bn by 2013, with more than a third coming from its investment banking unit. However, this target was challenged in the third quarter as Europe's sovereign debt crisis worsened.

"Capital markets remained difficult in October, but have shown some improvement since the announcement by eurozone leaders last week," Barclays said. "Our retail, corporate and wealth businesses have performed broadly in line with their underlying run rates for the first nine months of the year."