Regulation & ComplianceDrop in Barclays profit follows misconduct fine prep

Drop in Barclays profit follows misconduct fine prep

Barclays reported a fall in profits as it set aside more funds to cover potential fines for currency market manipulation and PPI compensation.

Barclays reported a fall in profits as it set aside more funds to cover potential fines for currency market manipulation and PPI compensation.

The bank increased its provision to cover potential fines relating to an investigation into currency market manipulation from an expected £750 million to £1.25 billion. It also set aside another £200 million for PPI compensation relating to the final three months of 2014, bringing the year’s total up to £1.1 billion.

Thanks to these provisions and other charges, the bank’s statutory pre-tax profits fell 21 per cent to £2.2 billion in 2014, the BBC reported. Were these to be discounted, the adjusted profits would have risen by 12 per cent to £5.5 billion.

Boss Anthony Jenkins was awarded a £1.1 million bonus, pushing his pay package to £5.5 million for 2014. Jenkins defended his bonus, saying that the bank had made a “huge amount of progress” in 2014, cutting operating costs by 22 per cent to £1.86 billion.

While Jenkins says that the bank its healthiest position yet since the financial crisis, the added currency market manipulation provision suggests that the American Department of Justice may be preparing to fine the bank.

UK and US regulators fined HSBC, Royal Bank of Scotland, Swiss bank UBS, and US banks JP Morgan Chase, Citibank and Bank of America a total of £2.6 billion for trying to manipulate foreign exchange rates.

Barclays is still subject to a separate probe.

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