Barclays has increased its provison for the legal costs of foreign exchange rate-rigging by £750 million to £1.25 billion and revealed that it faces a string of other legal issues.
A new investigation into its con-troversial capital-raising from Qatari investors in 2008 has been opened by a regulator that the bank did not name.
Barclays is also being investigated over the Qatari money by the Serious Fraud Office, the US Department of Justice and the US Securities and Exchange Commission. It has already been fined £50 million by the Financial Conduct Authority for not properly disclosing fees that were part of the fundraising. Barclays is contesting the fine.
The bank also said that it was providing information to the justice department in an unconnected investigation into precious metals trading.
Barclays’ increase to its previous £500 million foreign exchange provision was higher than expected. The bank had surprised equity markets in November by pulling out at the last minute from a £2.6 billion settlement between six international banks and American, British and Swiss regulators. It dropped out after Benjamin Lawsky, New York state’s superintendent of financial services, balked at the deal, viewing the penalties as too lenient.
Barclays has said that it wants to settle with as many regulators as possible — a decision that some observers believe may backfire if it ends up paying more than some of its peers.
A Barclays shareholder said that uncertainty about the forex investigations was making the market “nervous”.
Pre-tax profits fell by a fifth to £2.3 billion in 2014, dragged down by a 32 per cent fall in investment banking profit. The bank took another £200 million provision for mis-selling payment protection insurance and had to write down £935 million on the way it valued a book of social housing loans. The one-off items meant that Barclays fell to an attributable £174 million loss last year, compared with a £540 million profit in 2013.
The bank maintained its final dividend at 6½p, a move that disappointed investors. Its shares closed down 3.2 per cent, or 8½p, at 254¼p.
Antony Jenkins, the chief executive, received £5.5 million as he decided to take his £1.1 million bonus this year after refusing it since his promotion to the top job in 2012, and was also given a £950,000 allowance. Mr Jenkins said he thought the payment “appropriate” after he led a drive to improve Barclays’ capital ratio to 10.5 per cent and leverage ratio to 3.7 per cent — both significantly better than when he took over as chief executive.
Analysts believe that John McFarlane, the incoming chairman, may decide that drastic action is needed. One significant investor said: “The chairman is going to have to satisfy himself very quickly if he thinks Antony Jenkins is the right man for the job.”