Barclays 2008 profit to include all writedowns

LONDON (Reuters) - BARCLAYS (BARC.LO) said on Monday that its projected 2008 pretax profit of more than 5.3 billion pounds ($7.3 billion) would include the impact of 8 billion pounds in gross writedowns.

At 0808 GMT, Barclays' shares were trading up 25 percent at 64.40 pence.

Repeating a forecast issued on January 16, the bank said it expected to report a full-year profit before tax "well ahead" of the market's consensus estimate of 5.3 billion pounds.

"The profit is struck after all costs, impairment and market valuations," the bank added on Monday.

Barclays also said the profit included gains stemming from its acquisition of Lehman Brothers' North American business and the sale of its closed life unit but that overall the projected profit reflected "strong operating profit generation."

Chairman Marcus Agius and Chief Executive John Varley said in an open letter to customers and shareholders that, net of its own credit, hedging and attributable income, the bank's writedowns for the year would be about 5 billion pounds.

"These figures demonstrate that although we have been heavily impacted by the credit crunch, our income generation was at a record level in 2008 and has enabled us to withstand this impact and still produce strong profits," they wrote.

Agius and Varley said the letter, which follows sharp falls in Barclays' share price, aimed to address "the principal causes of concern which we are hearing."

"Writing in this way ahead of the release of results is unusual, of course, but the turn of events is also unusual," they wrote.

Shares in Barclays have lost more than two-thirds of their value over the last two weeks amid concerns the bank will be forced to raise fresh capital as writedowns mount in tandem with the slowing global economy.

However, Barclays said on Monday it had 36 billion pounds in committed equity capital and reserves and was not seeking new capital from either the British government or the private sector.

The bank said it had seen "a good start to 2009" and customer activity levels had been high.

"In particular the operating performance of Barclays Capital, benefiting as it is from the now completed integration of the Lehman business, has been extremely strong."

The bank said it would bring forward the release of full 2008 financial results to February 9.

(Editing by Karen Foster)