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Thursday May 6th, 2021
International news

Barclays takes extra $1.2 bln hit for potential FX settlements

LONDON, April 29 (Reuters) – Barclays set aside another 800 million pounds ($1.2 billion) on Wednesday to cover potential settlements for alleged foreign exchange manipulation, dragging its profits down by a quarter.

Barclays said it had now set aside 2.05 billion pounds to cover any FX settlement, after the extra provision to reflect "developments with certain authorities" since it last reported in March.

It did not provide any more details on any potential deal. Barclays pulled out of a settlement between U.S. and UK authorities and six rival banks in November because it had not reached a deal with New York’s regulator. It said it wanted to settle the allegations with as many agencies as possible in one go.

Barclays also set aside another 150 million pounds for compensating customer mis-sold insurance products in Britain, which has now cost Barclays 5.4 billion pounds and all British banks more than 26 billion.

The cost of settling past misconduct issues continues to dog Barclays’ attempt to turnaround the bank, shift its focus away from investment banking and improve profitability.

The bank reported a statutory pretax profit of 1.3 billion pounds, down 26 percent from a year ago.

Its underlying pretax profit, stripping out the provision, was 1.85 billion pounds, up 9 percent from a year ago and just above the average forecast of 1.81 billion pounds from analysts polled by the company.

Revenues for its core investment bank were 2.2 billion pounds, in line with analysts’ expectations and up 2 percent from a year ago and 30 percent higher than the previous quarter.

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