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Profits overshadowed by provisions

Barclays adds £800 million to forex rigging bill

BarclaysA rise in underlying profit at Barclays in the first quarter was overshadowed by setting aside a further £800 million to meet costs associated with the foreign exchange scandal.

Underlying pretax profit was up 9% on a year ago at £1.85 billion, but statutory pretax profit came in 26% lower at £1.3 billion.

Provisions for potential fines and other costs for the mishandling of forex now stand at £2.05bn, while £5.37bn has been set aside for mis-sold payment protection insurance.

Barclays is still to settle with the Financial Conduct Authority or American authorities, and the likely substantial bill is a major headache for chief executive Antony Jenkins’ attempts to rebuild its reputation.

The core business continues to perform strongly with a 14% growth in profit to £2.1bn. Profit at the investment bank rose by 37%.

Mr Jenkins said: “The Transform strategy is working and, while there is more to do, the business is starting to realise its potential.

“Resolving legacy conduct issues is also an important part of our plan to transform Barclays. We are working hard to expedite their settlement and have taken further provisions of £800m this quarter, primarily relating to Foreign Exchange.

“While we still have much to do, I am pleased with how we’ve begun 2015.”

Simon Chouffot of the Robin Hood Campaign, said: “It’s a disgrace that such industrial-scale scamming has become the norm in the City. It’s bad for banks and it’s bad for Britain.

“We must get a tighter grip on the financial sector to ensure it contributes positively to society instead of finding new ways to fleece us.”

 

 

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