Barclays Wealth’s management division has seen a 27 percent increase in profits, despite higher costs from starting its technology and people investment programme.
The division reported pre-tax profits of £95 million in the half year ended June, up from £75 million in the same period in 2009. As a group, CIO 100 ranked Barclays reported a 44 percent increase in pre-tax profit to £3.95 billion.
In the latest financial report, Barclays said: “In Barclays Wealth, our income performance in the first half started to show the benefit of the investment we have made in the business over the past years.
“We now have a broad investment programme underway, which we intend to accelerate in the second half of 2010 as we build out the international platforms and invest in people, technology and infrastructure.”
Barclays Wealth announced a five-year plan to spend £230 million on upgrading its IT and infrastructure earlier this year. The division is also spending £120 million on several hundred new client-facing staff.
Under the £350 million programme, the division has so far invested £33 million, and is expected to increase to £80 million in the second half of 2010.
As a result of the investment, operating expenses at Barclays Wealth increased 20 percent to £635 million, from £528 million in 2009.
However, the bank said that its Barclays Capital division accounted for most of the group’s operating expenses, which had increased by 21 percent (£1.7 billion) to £9.7 billion. Barclays said that the Capital division accounted for around £1 billion of this increase, reflecting investment in the business, including technology and infrastructure, sales and research functions.