Last checked at 
* H1 profit 5 billion pounds (2020: 1.3 billion)
* Bank launches 500 million pound buyback
* Dividends continue as curbs scrapped
* Shares rise 4%
(Adds share reaction, comments)
By Lawrence White and Iain Withers
LONDON, July 28 (Reuters) - Barclays will pay out
more than a billion dollars in dividends and buybacks to
shareholders after beating first-half profit forecasts on strong
investment banking fees and the release of cash set aside to
cover bad loan charges.
The British bank, which reported a near-quadrupling in
first-half profits, said it would pay an interim dividend of 2
pence per share, equivalent to around 340 million pounds in
total, after the Bank of England in July scrapped payout curbs.
Barclays will also buy back 500 million pounds of its own
shares, as it forecast bad loan charges would remain below
historical levels due to the improved economic outlook and low
default rates on unsecured lending.
The bank said it was able to release credit provisions due
to the improved economic outlook since the start of the year,
with the UK economy forecast to reach pre-pandemic levels mid
next year in its core scenario.
But Barclays also said that the full impact of the wind-down
of government support measures on customer finances was not yet
known.
"No one has really lived through the unwind of these
schemes, and therefore we don't entirely known how many
furloughed people will get jobs or not get jobs," Finance
Director Tushar Morzaria told Reuters.
The bank also factored in a severe downside scenario into
its forecasts in case vaccine supply was disrupted and new
variants were resistant to vaccines.
Barclays shares rose 4%.
The bank reported profit before tax of 5 billion pounds
($6.94 billion) for the six months to June 30, well above the
consensus forecast of 4.1 billion pounds from analysts polled by
the bank and up from 1.3 billion a year ago.
The results were boosted by the bank releasing 742 million
pounds in cash set aside for bad debt charges that have yet to
materialise, as government support measures prop up the economy.
"Barclays undertaking a further share buyback and upping its
half-year dividend marks another step on the road to recovery
for the UK’s major banks and financial sector, at large, from
the dark days of dividend suspensions," said John Moore, senior
investment manager at Brewin Dolphin.
TRADING FRENZY
Barclays' investment bank continued its strong run, as
volatile markets during the pandemic led to frenzied trading,
while companies have raised record amounts through blank-cheque
investment funds and stock listings.
Equities income rose 38% and investment banking fees from
advising on deals rose 27% in the first half of the year,
Barclays said.
Its fixed income, currencies and commodities (FICC) business
meanwhile fell 37% against a strong first half a year ago.
The bank said its costs rose 10%, mainly from 300 million
pounds of expenses associated with cutting its real estate
footprint and higher bonuses due to its improved performance.
Analysts said that while Barclays' first half results were
strong, it would need to rein in those costs and put forward a
convincing plan to improve revenues in the longer term.
"The key question as with other banks, is the outlook on the
growth of their loan book and net interest income," said
Sudeepto Mukherjee, financial services consultant at Publicis
Sapient.
"Barclays shares have been under pressure in the last few
months and we have not seen them capture significant share from
the buoyant mortgages market in the UK," he said.
($1 = 0.7206 pounds)
(Reporting by Lawrence White and Iain Withers; editing by John
O'Donnell, Jason Neely and Jane Merriman)
