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Barclays meets forecasts but unveils two new US probes

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Barclays swung to a statuary loss before tax in the third quarter of 2012.

However,  the adjusted bottom line – a better measure of its underlying performance – saw strong growth when excluding the £1.8bn pounds in own credit charges and compensation for mis-sold Payment Protection Insurance (PPI).

On an adjusted basis, pre-tax profit totalled £1.73bn in the three months to September 30th, pretty much flat quarter-on-quarter but well ahead of the £1.34bn reported in the third quarter last year. This was broadly in line with analysts’ forecasts.

Shares fell 2.72% to 232.3p in early trading on Wednesday.

So far this year, the company has taken £1bn in provision for PPI redress, £700m of which was realised in the third quarter. The firm also took a charge of £1.07bn on its own credit, during the three-month period, compared with £263m in the third quarter of 2011.

On a statutory basis, which includes these ‘one-offs’, the firm registered a loss before tax of £47m, compared with a profit of £813m the year before.

“Adjusted results provide a more consistent basis for comparing business performance between periods,” a Barclays spokesperson explained.

Adjusted profit before tax for the first nine months of the year is now up 18% at £5.95m, from £5.06bn in the same year-ago period. Adjusted income net of insurance claims was £6.87bn in the third quarter, down from £7.0bn the year before.

However, after taking into account credit impairment charges and other provisions, the statutory net operating income improved from £5.98bn to £6.05bn.

Nine-month adjusted income was flat year-on-year at £22.35bn. The company said that it was able to reduce its sovereign exposures to Spain, Italy , Portugal, Ireland, Greece and Cyprus by 15% during the third quarter to £4.8bn.

The Core Tier-1 capital ratio improved from 10.9% at the end of the first half to 11.2%.

A Barclays spokesperson said: “Risk weighted assets reduced 3% to £379bn, principally reflecting risk reduction in Corporate and Investment Banking and foreign exchange movements, partially offset by a change in methodology on loss given default for sovereign exposures.”


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