British bank Barclays on Thursday said net profit rose 12 percent in the first quarter to 826 million pounds, boosted by its part-purchase of failed US investment giant Lehman Brothers.
Profit after tax jumped to an equivalent of 942 million euros or 1.25 billion dollars in the first three months of 2009 compared to the first quarter of 2008, Barclays said in an earnings statement.
Sales surged 42 percent to a record 8.15 billion pounds and Barclays added that it would resume shareholder dividend payments in the fourth quarter of 2009 after suspending them last year at the height of the financial crisis.
Barclays chief executive John Varley said the bank "generated strong income growth," in the January-March period, driven by its purchase of the investment banking and trading units belonging to Lehman Brothers.
US banking giant Lehman went bankrupt last year following the collapse of the US housing market and resulting credit crunch, plunging the global financial system into turmoil.
"The acquisition and successful integration of the Lehman business resulted in a transformational change in (Barclays' investment unit) Barclays Capital, where profit before tax was very substantially ahead of last year rising 361 percent to 907 million pounds," the British bank said on Thursday.
Barclays purchase of Lehman businesses, "together with good cost control," meanwhile enabled the British bank to "shield the anticipated increase in impairment and absorb further credit market writedowns," added Varley.
Barclays said its first quarter results included net losses from credit market writedowns of 2.152 billion pounds. Total losses from bad debts came to 2.309 billion pounds, up 79 percent from a year earlier.
Reacting to the results, investors sent Barclays' share price soaring 4.25 percent to 300.25 pence in early trade on London's FTSE 100 index, which was up 1.20 percent at 4,449.21 points.
Barclays' share price has rocketed from a low of 51.20 pence on January 23 as the group spurned government help and reported strong results.
Barclays, unlike some of its peers, has avoided nationalisation in the wake of the credit crunch by courting investment from wealthy Gulf states.
Last month meanwhile, the bank sold its asset management business iShares to private equity group CVC Capital Partners for 4.4 billion dollars.
In 2008, Barclays secured additional capital from investors in Abu Dhabi and Qatar in order to bolster its finances.