BARCLAYS Bank overcame a surge in bad debt at Barclaycard to post better-than-expected half-year profits of £2.69bn yesterday.

The nine per cent rise in profits followed record results in investment banking and strong international and commercial banking.

But Barclaycard saw profits slip 17 per cent to £379m as the credit card division, which has a call centre in Teesside, took a £508m charge to cover deteriorating credit quality. In the UK high street banking arm, profits decreased by two per cent to £549m.

Barclays first warned in May that profitability at Barclaycard would be hit by an increase in customers missing at least one repayment.