Barclays profits up 12% despite rate-rigging scandal

Barclays profits up 12% despite rate-rigging scandal

Barclays took an additional £750m hit to cover alleged involvement in the foreign exchange rate-rigging scandal as it announced a rise in annual profits today.

Chief executive Antony Jenkins said the group was stronger than at any time since the financial crisis as it announced a 12% rise in adjusted pre-tax profits to £5.5bn.

But the lender's latest forex provision took its total exposure to the affair so far to £1.25bn while it also added £200m to provide for the ongoing compensation programme for customers mis-sold payment protection insurance.

The level of bonuses paid by the bank fell 22% to £1.86bn.

Mr Jenkins said: "Barclays today is a stronger business, with better prospects, than at any time since the financial crisis."

8Mr Jenkins is taking his first annual bonus since becoming chief executive in 2012 - of £1.1m - after declining the previous two.

Together with long-term awards and other remuneration it takes his total 2014 package to £5.5 m.

The sum is likely to cause controversy following a year in which Barclays has axed 14,000 jobs and closed a net 72 branches.

Statutory annual profits at the bank were down 21% after taking hits including those for the forex scandal and PPI as well as a £446 million loss on the sale of Barclays' Spanish business.

Mr Jenkins said: "While our work in transforming the bank is not complete, our performance in 2014 gives us confidence that we are on the right track."

Barclay's investment bank, which is being shrunk under plans to transform the group, saw profits fall 32% to £1.38bn.

Finance director Tushar Morzaria said: "Although there remains uncertainty in the global macroeconomic environment, which is expected to persist through the year, we believe there will be greater clarity on regulatory requirements and several conduct issues during 2015."

Barclays did not enter into the settlements last November which saw six banks fined £2.6bn over forex rigging by global regulators including the UK's Financial Conduct Authority (FCA).

It said it was seeking a "more general co-ordinated settlement" - with other authorities in the US still investigating the scandal.

Barclays said it is reviewing its foreign exchange trading over a several-year period and continuing to co-operate with relevant bodies, and that these probes could result in "substantial monetary penalties".

Meanwhile, the bank said profits at its personal and corporate banking arm rose 29% to £2.88bn, driven by income from personal accounts as well as lower bad loan impairments amid the improving UK economy.

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