Barclays bank sets £500m aside for forex probes

GMT 14:36 2014 Thursday ,30 October

Arab Today, arab today Barclays bank sets £500m aside for forex probes

Barclays bank
London - AFP

Scandal-hit British bank Barclays has set aside £500 million ($800 million, 634 million euros) linked to global probes into allegations of price-rigging in foreign exchange markets, cutting net profits, it said on Thursday.
"A £500-million provision has been recognised relating to ongoing investigations into foreign exchange with certain regulatory authorities," the London-listed lender revealed in a statement.
The announcement from Barclays -- which was also at the heart of the 2012 Libor interest-rate rigging scandal -- comes as global regulators investigate the alleged rigging of foreign exchange markets around the world.
In Britain, both the Serious Fraud Office (SFO) and the Financial Conduct Authority (FCA) watchdog have launched probes into the alleged manipulation of the £3-trillion-a-day forex market.
Barclays added in its results statement that net profit or earnings after taxation plunged 25 percent to £379 million in the three months to September. That compared with £511 million the same period of last year.
The performance was also weighed down by a £364-million loss from the sale of its Spanish retail business.
Barclays, which has been plagued by scandals in recent years, also set another £170 million aside for compensation costs arising from the mis-selling of payment protection insurance (PPI).
That took its total PPI mis-selling bill to more than £5.0 billion.
At the same time, Barclays also took a £461-million gain related to its 2008 purchase of the US business of failed US investment bank Lehman Brothers.
The bank added on Thursday that adjusted pre-tax profit -- after stripping out charges and other exceptional items -- rose 15 percent to £1.59 billion in the third quarter. That beat expectations of about £1.21 billion, owing to lower-than-anticipated restructuring costs.
- 'Disappointing' performance -
"This is a good performance from the group, our strategy is working, and we expect to see continued progress as we go forward," said chief executive Antony Jenkins.
He acknowledged however that the performance of the group's investment banking division had been "disappointing" as its pre-tax profit fell 39 percent to £284 million.
Jenkins launched plans in May to shrink the investment bank in a radical restructuring which will axe 19,000 jobs across the group by 2016, as he shakes up the scandal-tainted company.
The Libor scandal erupted when Barclays was fined £290 million in 2012 by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
The scandal sparked the resignations of three Barclays senior board members, including ex-chief executive Bob Diamond, who was formerly head of the investment bank unit.
Euribor is the eurozone equivalent of Libor, and interbank rates are the rates at which banks lend to each other. The Libor rate is a benchmark on which are based vast numbers of financial contracts around the world.
In late morning trading, Barclays shares added just 0.23 percent to 221 pence in cautious deals on the FTSE 100 index, which was down 0.75 percent at 6,405.35 points.


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