You are here: Home - Investing - Experienced Investor - News -

Barclays’ extra £750m forex provision overshadows profit rise

0
Written by: Anna Federova
03/03/2015
Barclays has made increased provisions for a probe into currency market manipulation and other issues, masking a rise in adjusted pre-tax profits.

The bank increased provisions for potential forex costs by £750m to £1.25bn, with this and other provisions prompting a 21 per cent fall in statutory pre-tax profit, to £2.26bn.

Stripping out these safeguards, pre-tax profits at the bank rose 12 per cent during the year to £5.5m, while operating expenses were down 9 per cent as a result of a focus on cutting costs. The bank has also set aside an additional £200m for PPI redress, resulting in a full year net charge of £1.1bn.

Its wealth and investment management division saw net income rise just 1 per cent to £1.1bn, with gains for the UK offset elsewhere. Separately, Barclays made a loss of £446m on the sale of its Spanish business, which completed on 2 January 2015, and a further £100m in losses in Q1.

However, these costs were slightly offset by a £461m gain on the US Lehman acquisition assets, up from £259m the previous year.

Despite the further provisions and losses, the bank’s total operating expenses are down year-on-year, from £19.9bn to £18.1bn, excluding costs for its Transform programme, aiming to turn around the bank’s fortunes.

Antony Jenkins, group chief executive, took home a £1.1m bonus – 57 per cent of his maximum entitlement – to take his total 2014 pay above the £5m mark, but the overall bonus pool fell 22% to £1.86bn.

Jenkins said: “On cost, we delivered significant reductions in 2014, with operating costs reducing nearly £1.8bn, equivalent to 10 per cent of the group adjusted cost base excluding costs to achieve Transform.

“This achievement over the past 12 months, with further reductions to come in 2015, will better position Barclays to grow returns and drive sustainable competitive advantages across all of our businesses.” However, the chief executive did not underestimate the weight of the forex trading charges, saying these issues are a key focus for the new year.

“I regard the behaviour at the centre of these investigations as wholly incompatible with our values, and I share the frustration of colleagues and shareholders that matters like these continue to cast a shadow over our business.

“But resolving these issues is an important part of our plan for Barclays and, although it may be difficult, I expect that we will make significant progress in this area in 2015.”

The bank has also maintained its dividend per share at 6.5p, though unchanged from the previous year, and continues to target a 40 per cent-50 per cent payout ratio.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
House price growth continues to slow

The latest Nationwide house price index said yearly growth had fallen back from the 6.8 per cent recorded in January...

Close