Pre-tax profits at Barclays Capital rose 5% to a record £2.3bn (€3.1bn) last year, but growth slowed in the second half as £1.6bn in net losses driven by credit market turbulence took their toll.

The investment banking arm of Barclays had assumed the mantle of the UK group’s highest earning business at the half-year stage last year, before the global credit downturn. Barclays Capital built on strong profit growth the previous year and left chief executive Bob Diamond on track to meet the division's £2.6bn profit target for 2010 three years early.