BARCLAYS said yesterday it was on course for profits of about £4.54bn this year - despite a flat performance from its UK retail banking business.

The group said pressure on its mortgage operations, following a number of interest rate rises, had offset continued good growth in levels of customer deposits at the high street part of the UK business.

Elsewhere in the group, its international, investment banking and wealth management operations performed strongly, with Barclaycard posting a solid showing in the first nine months of the year.

As a result, Barclays expects full-year profits to be in line with market forecasts of £4.54bn - an improvement of 18 per cent on a year earlier.

Chief executive John Varley said: "Barclays remains on track to deliver a very strong performance in 2004. As we continue to increase earnings, we continue to invest for the future."

Barclays UK restructuring saw it cut 800 office jobs and recruit an extra 1,000 branch workers.

At Barclaycard - one of the company's strongest performers last year with a gain of 17 per cent in profits - the group said margins had come under pressure from successive interest rate rises and the impact of promotional offers.

However, the overall performance was described as solid following good growth in credit balances.