Barclays Bank posted first-quarter profits even as it set aside an additional £800 million-pound ($1.2 billion) provision toward settling allegations it rigged currency benchmarks.
Pretax profit, including restructuring costs, rose 5.9 per cent to £1.8 billion in the year-earlier period, it said in a statement on Wednesday.
The provision brings to £2.1 billion the amount Barclays has set aside to cover allegations traders colluded to rig key benchmarks in the foreign-exchange market.
Barclays dropped out of a settlement in November, when banks including Citigroup and UBS paid a total of $4.3 billion in fines.
"We are working hard to expedite their settlement and have taken further provisions of £800 million this quarter, primarily relating to foreign exchange," chief executive Antony Jenkins said in the statement.
“The investment bank had a good first quarter representing a performance which is more indicative of the potential of the franchise following the repositioning undertaken last year.”
Jenkins has been under pressure to deepen cuts at the investment bank, which was hurt by a series of fines, after pledging to eliminate some 7,000 jobs.
John McFarlane, who joined as chairman last week, has vowed to reallocate capital and prioritize investment in the most profitable parts of the firm to bolster earnings.
PPI Provision
Barclays also set aside 150 million pounds for payment protection insurance redress.
Barclays, Britain’s second-biggest lender by assets, closed at 261.40 pence on Tuesday, down 0.9 per cent on the day.
The shares have risen 7.4 per cent this year, compared with a 7.5 per cent gain for banks trading on the UK’s FTSE 350 index.
The firm’s return on equity, a measure of profitability that takes into account how much capital the business uses, was 7.6 per cent, up from 6.5 per cent a year earlier.
Including provisions, pretax profit fell to £1.3 billion from £1.8 billion a year earlier.
The investment bank, run by Tom King, had a pretax profit of £675 million, up from £491 million.
Revenue from equities rose to £619 million in the first quarter from £591 million a year earlier, while investment banking fees rose to £549 million from £513 million.
- Bloomberg
