£500m set aside for Forex scandal

0
Have your say

​Barclays has set aside £500​m​ over the alleged rigging of foreign exchange (forex) markets which are being probed by regulators around the world.

It adds to penalties and compensation costs it has already had to shoulder to deal with other scandals such as payment protection insurance (PPI) mis-selling and a £290​m fine for Libor rate-rigging in 2012.​ ​In the UK, the Serious Fraud Office (SFO) and the Financial Conduct Authority (FCA) have both launched investigations into the alleged manipulation of the £3 trillion-a-day forex market.

FCA chief executive Martin Wheatley has described the claims as “every bit as bad” as the Libor scandal that has cost banks billions in penalties.

Barclays announced the provision as it published results showing a ​four per cent​ rise in pre-tax profits to £1.22​bn for the third quarter.

It said a £500​m provision had been recognised “relating to ongoing investigations into foreign exchange with certain regulatory authorities”.

The bank also added an additional £170​m to its pot of money for settling PPI compensation claims.

Chief executive Antony Jenkins admitted the performance of the group’s investment banking arm during the quarter had been “disappointing” as profits fell 39​ per cent​ compared with the same period last year to £284​m.

Mr Jenkins has taken an axe to the division, built up by former boss Bob Diamond, announcing thousands of job cuts in the business earlier this year - among 19,000 that will go across the group by 2016.

He today said that Barclays had made “further steady progress” on plans to transform the wider group, and hailed the performance of its core businesses.

The personal and corporate banking division that includes Barclays’ high street operations benefited from the improving UK economy as the hit from bad loans fell compared to last year though they were higher than the second quarter of 2014.

Profits from the division were up 11​ per cent​ to £789​m, but this was slower than the 30​ per cent​ growth for the second quarter.