THE end of the banking crisis that triggered the UK recession could be in sight after banking giants Barclays and HSBC today reported multi-billion pound profits.

Barclays, which received no financial assistance from taxpayers, saw group pre-tax profits rise to Pounds 2.98bn -- up 8 per cent after a bumper six months for its investment banking arm.

The firm's investment banking division -- Barclays Capital -- posted a 100 per cent increase in profits to Pounds 1.05bn.

"Investment banking is back. If you are a big company you are going to gravitate towards banks that have not received government funds," Ralph Silva, banking analyst at Tower Group, said.

Rival HSBC, which has also managed to shore up its finances in the crisis without a government hand-out, announced profits of $5bn (Pounds 2.98bn) today. Although HSBC said that profits had fallen 51 per cent as its debt charges soared, its profits are double what some analysts had forecast.

But the company also benefited from record investment banking profits of $6.3bn (Pounds 3.75bn) during the first half of the year - - more than double the level of 2008.

Cecil Russell, HSBC regional director for Northern Ireland, said: "Overall we are satisfied with these results, as we have delivered what we set out to achieve in the first half of 2009.

"We have had to make carefully considered decisions in light of the current economic environment and we believe we can deliver sustainable long-term growth when the current global downtown has ended. HSBC is both strongly capitalised and highly liquid."

And on Friday, bailed-out Royal Bank of Scotland, parent group of Ulster Bank, is tipped to report first-half pre-tax profits of Pounds 1.2bn after a record loss of Pounds 24bn in 2008.

It comes a year after the collapse of the financial system which forced the government to nationalise a number of banking giants and triggered substantial job losses in the sector.

Today's positive results for Barclays also come after a recent run of data that indicates the worst of the recession may now be behind us.

Industry body CBI said the prospects for smaller firms are starting to improve, according to research today.

Leading UK shares closed on Thursday at their highest level for almost seven months, after better-than-expected corporate results boosted investor confidence.

The FTSE 100, which had endured an 11-day winning strike, finished up 84 points, or almost 2 per cent, at 4,631.6 -- its highest close since January 6.

Meanwhile, mortgage lending climbed to a 14-month high according to the Bank of England while the number of mortgage approvals rose for the fifth month in a row, the latest figures show.

And last week the latest survey from Northern Bank showed that consumer confidence in Northern Ireland was at a 10-month high.

However, Barclays did see bad debts almost double.

Impairments and other credit provisions jumped to Pounds 4.56bn, up 86 per cent from Pounds 2.45bn in the first half of 2008.

"We are realistic about just how difficult the environment is, and will remain, but we are committed to delivering another year of solid profitability through our continued emphasis on serving our customers and clients," Barclays chief executive John Varley said.

CAPTION: Barclays: profits up 8 per cent

Originally published by LINDSAY FERGUS, BUSINESS EDITOR, lfergus@belfasttelegraph.co.uk.

(c) 2009 Belfast Telegraph. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.