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Barclays sets aside £500m for forex probe as Q3 profits jump

Cherry Reynard
Written By:
Cherry Reynard
Posted:
Updated:
05/12/2014

Barclays has reported a 15 per cent rise in Q3 profit but also set aside £500m for potential fines relating to manipulation of foreign exchange markets.

Underlying pre-tax profit rose 15 per cent year-on-year in the third quarter, Barclays said, from £1.39bn to £1.59bn.

But the bank added it was putting aside the £500m in relation to “ongoing investigations […] with certain regulatory authorities” regarding foreign exchange.

It also set aside an additional £170m in payment protection insurance compensation, offset by the withdrawal of £160m in provisions for interest rate hedging product compensation.

The bank also booked a £461m boost from the expected recovery of Lehman Brothers assets it acquired during its 2008 purchase of the investment bank’s US business.

Barclays’ Q3 profit increase, driven by lower costs and fewer bad loans, came despite “disappointing” performance from its investment banking division, said chief executive Antony Jenkins.

Quarterly pre-tax investment bank profits dropped to £284m, down from £567m in Q2 and £465m a year previous.

Total costs from the bank’s ‘transform’ restructuring programme this year currently stand at £826m and are expected to reach £1.3bn by year-end, Barclays added.

[This year] continues to be a transition year as we invest in the business and focus on balance sheet optimisation and cost reduction, while addressing ongoing regulatory and litigation issues,” the bank said.


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