Barclays sets aside £500m in probe

Written By Unknown on Kamis, 30 Oktober 2014 | 15.36

30 October 2014 Last updated at 08:12

Barclays has set aside £500m "relating to ongoing investigations" into currency trading.

Barclays is among several banks being probed relating to alleged rigging of currency markets.

It also set aside an extra £170m to compensate customers wrongly sold PPI.

The bank reported a rise in pre-tax profits for first nine months of the year to £3.72bn from £2.85bn a year earlier as costs and bad loans fell.

Barclays reduced its provision for customers mis-sold interest rate hedging products by £160m, with the bank saying its review of customers sold the products was nearly completed.

The deals were mainly sold to businesses and aimed to control interest rates. As rates fell to historic lows in the wake of the financial crisis, business customers were often stuck on much higher interest rates.

Investment bank pressure

For the three months to the end of September, most of Barclays' businesses saw profits rise except its investment bank and Africa business. Third-quarter pre-tax profit in investment banking shrank to £284m from £465m, a performance chief executive Antony Jenkins described as "disappointing."

"We see [third quarter] results as a clear indication of a deleveraging investment bank under significant pressure," said Chirantan Barua, an analyst at Bernstein Research. The £500m currency trading reserve means it "looks like" the lender is "close to settling", he said in a note to clients.

Operating costs, which includes staff wages, dropped faster than expected, said Mr Barua.

Mr Jenkins is trying to rein in pay and plans to cut 19,000 jobs by 2016, with more than 9,000 to go in the UK.

As part of a new strategy, the investment part of the bank will lose about 7,000 jobs by the end of 2016.


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