Investors regain an attraction to Barclays

Barclays has announced pre tax profits of £6.1bn for 2010. Nick Raynor, investment adviser at The Share Centre, explains what this means for investors.

"Barclays was this morning's highest early riser as its share price rose 3% to 319.80p. As the bank announces pre tax profits well above the market forecast of £5.5bn, investors regain an appetite for our long term favourite in the banking sector.

"After continued speculation concerning banking bonuses, it was positive to see Barclays taking note and moving in the right direction as it cut performance award by 7% - however £3.4bn is still a hefty amount.

"Bad debt across the whole of the bank fell by 30%, however not all was rosy as Barclays Corporate made a pre tax loss of £631m, mainly due to bad debt charges of nearly £900m in Spain.

"Barclays continues to be our preferred bank and investors seeking exposure to the sector should be attracted by its ability to offer a dividend, its strong profit growth and its international exposure. We continue to list Barclays as a ‘buy' for investors willing to accept the level risk associated with the currently turbulent banking world."