British bank Barclays sees tougher market conditions as a growth opportunity for its UK mortgage business and retail arm, thanks to growing deposits and lower costs, senior executives told analysts on Tuesday.

The bank's head of UK retail, however, said Barclays would not pursue an aggressive strategy to grow its mortgage market share, despite product withdrawals across the wider sector, as UK lenders wrestle with higher costs and pull back credit.

"Any time you manage your business just to grow market share, it normally gets you into trouble," Deanna Oppenheimer told analysts.

She said the bank would be looking at product design - including products like "tracker" mortgages, which follow rate moves - but also at pricing in a constrained market and at a strengthened operational capacity to attract customers.

"We would look at it as an opportunity for profitable growth," she said.

Barclays, whose Woolwich mortgage arm lost market share until 2006, had a net mortgage market share of 9.3 percent in the second half of 2007, up from 4.5 percent a year before.

UK banks have been struggling with the impact of higher costs, a slowing property market and a weakening economy, but as the crunch threatens to slow a decade of spectacular growth for the bank's investment banking arm, executives said Barclays' retail and commercial operations would prove a growth engine.

At its UK retail arm, which accounts for some 18 percent of group profit, the bank has seen an improvement in bad loans, growth in customer balances and remains self-funding, with a 106 percent deposit-to-asset ratio.

Elsewhere, the bank said its Barclaycard business was also well placed to withstand the crisis, with its U.S. operations on track to meet a 2008 profit before tax goal of $150 million, thanks to an early prediction of the market slowdown and a subsequent pull back in lending.

Barclays said it also aimed to widen its commercial and retail banking presence in emerging markets after moving into Russia and Pakistan in recent months.