Barclays Is Expected to Raise First-Half Dividend

LONDON - Barclays Bank PLC, scheduled to announce half-year results on Wednesday, is likely to increase dividends moderately, according to analysts.

The increase, despite troubled market conditions, will enhance Barclays' leading position among British banks, the analysts said.

National Westminster Bank is forecast to leave its half-year dividend unchanged, while Midland Bank could omit its payout, analysts said.

LLoyds Bank, which has traditionally focused hardest on rewarding shareholders, on Friday posted a dividend of 3.2 cents for the half year to June 30, up from 3 cents.

"Results will demonstrate the widening performance gulf between Barclays and NatWest, and Barclays is likely to reinforce this with a dividend increase," said analyst Hugh Pye at Robert Fleming Securities.

Mr. Pye said Barclays' stronger capital ratios gave it scope to increase lending this year by more than 20%, compared with an estimated 10% for NatWest, without risking a strain to its ratios when demand returns to the market.

Peter Toeman, an analyst at UBS Phillips & Drew, said Barclays was likely to report a lower ratio of bad debts to advances than other banks and had set aside proportionately less in provisions throughout the recession.

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