Barclays on Thursday gave an upbeat assessment of the prospects for its investment banking arm as it wrote off £1.3bn ($2.65bn) as a result of the turmoil in the credit markets.

Bob Diamond, president of Barclays, insisted that long-term growth prospects for the Barclays Capital division were largely undimmed in spite of months of upheaval triggered by the meltdown in the US subprime mortgage market.