Barclays costs hit profits

Barclays will spend £1bn (€1.38bn) to shield its UK retail customers from riskier areas of the business, it said yesterday, prompting the lender to increase its costs guidance for next year and cut its returns target.

The British bank also set aside £290m to compensate customers mis-sold foreign exchange products as it reported a 10% drop in quarterly profit.

Barclays detailed for the first time the expected costs associated with the so-called ring-fencing of its UK retail bank, required by law to be in place by 2019, and the setting up of a holding company for its US investment bank by mid-2016.