BANKING group Barclays today revealed a 33 per cent first-half profits slump as it suffered £2.8bn of credit crunch write-downs.

The group posted £2.75bn pre-tax profits for the six months to June 30, after racking up another £1.1bn of credit crunch impairments on top of the £1.7bn reported during the first three months.

Chief executive John Varley said the group had experienced `significant' write-downs and the profits decline was `acutely disappointing'.

Barclays said that even excluding sub-prime related charges, its bad debt charges increased 40 per cent during the period.

The group's total for impairment charges and credit provisions was £2.45bn during the first half, up from £959m a year ago. While write-offs among its UK mortgagors remained `very low', and increased slightly in the US, Barclays said it suffered `significant growth' in impairment charges for international retail and commercial banking.

The bank has 11.5m UK customer accounts and 786,000 mortgage accounts.

At its credit card operation, Barclaycard - which has 11.9m UK customers - bad debt charges increased 10 per cent, reflecting the inclusion of the recently acquired Goldfish business and increased charges in Barclaycard International.

Barclays' investment banking appeared to be among the worst hit areas, thanks to credit crunch write-downs. The division, headed by American banker Bob Diamond - who was paid nearly £22m last year - saw pre-tax profits slump 68 per cent to £524m.

Mr Varley said: "The conditions in the market that we have seen over the course of the last 12 months are as difficult as we have experienced in many years."

And they would remain tough over the `foreseeable future' - "we are now seeing the impact of slowing economies around the world."

The bank's £2.8bn of credit crunch write-downs during the first half have been offset with revaluation gains of £852m, to give a net impact of around £2bn. Barclays shares gained 19.6p to 388.6p.