Barclays is the first of the UK's five big banks to post its annual results

Pre-tax profit in the 12 months to 31 December rose by 15% from �4.55bn in 2004, the bank said. Overseas operations made up 40% of the total.

Barclays also has benefited from higher earnings at its investment arm.

That helped offset a 19% drop in profits at its Barclaycard division, with the bank blaming a rise in bad debts and increased US investment.

'Broadly-based growth'

Profit at its Barclaycard division totalled �687m, and the lender added that the money it classifies as bad debt - loans it does not expect to get back - rose 44% to �1.57bn.

Barclays is trying to limit UK loan losses by tightening up its loan criteria, while chief executive John Varley said it was also now turning down one in every two credit card borrowers.

"We will remain selective (on lending) and it's right that we should, as I see some caution among consumers over 2005 and 2006," Mr Varley told Reuters.

"But are we frozen in the headlights of some economic downturn? No not at all."

We made good progress in the UK, and are well positioned across the group for further growth in 2006 John Varley, Barclays Check Barclays' share price

"Obviously, the question is what happens in 2006 and some analysts have been hoping that the problems on the consumer credit side will start to flatten out into this year," said Richard Staite, an analyst at SG Securities.

"The question is whether it actually continues to get worse and then ultimately whether the rise in personal sector bankruptcies feeds into corporate bankruptcies," he said.

A 35% rise in profits to �1.27bn at its Barclays Capital investment arm, helped offset the increase in bad debt losses.

High Street revamp

Meanwhile, the group's UK banking division experienced more modest growth, as earnings improved 8% to �2.44bn.

In an effort to boost its High Street business the bank has embarked on a �7m investment drive to overhaul its branches.

"Barclays delivered strong and broadly based profit growth in 2005," Mr Varley said.

"We made good progress in the UK, and are well positioned across the group for further growth in 2006," he added.

Mr Varley also praised progress at the bank's latest acquisition, South African lender Absa.

The firm snapped up a majority stake in South Africa's largest retail lender for �2.6bn in July last year.

Barclays is the first of the UK's big five banks to post its annual results in what is expected to be a record-breaking results season in the sector.