Barclays Announces Pre-Tax Profit of £1.7 Billion

on Oct 31, 2012
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Barclays (LON:BARC), the London-listed financial services provider, this morning (October 31st) released its third-quarter results, which showed pre-tax profit rising 29 percent in the July-September period boosted by revenue increases in the fixed-income arm of the bank. Pretax profit, excluding provisions and accounting losses from revaluing the bank’s own debt, rose to £1.73 billion. The results slightly beat analysts’ forecasts of a pre-tax profit of £1.7 million. According to analysts, the bank is in a stronger position than its rivals to cope with the troubled Eurozone and the tougher finance sector regulations.

Revenue from fixed income, commodities and currencies, also known as FICC, rose 10 percent year-on-year to £1.58 billion in the third quarter, pushing up investment-banking revenue 17 percent to £2.63 billion.
!m[](/uploads/story/679/thumbs/pic1_inline.png)“We continue to have good momentum in our businesses despite the difficulties we have faced,” the new chief executive Anthony Jenkins said today in the statement.

The bank became the first institution to face trial in a British court over damages related to the manipulation of the London Interbank Lending Rate (LIBOR). According to Reuters, Guardian Care Homes, a residential care home operator, will be suing Barclays for up to £37 million over alleged mis-selling of interest rate hedging products known as swaps. The company claims it needs to be compensated for its losses because the swap rates were based on the LIBOR. In June Barclays agreed to pay a $450 million settlement charge to US and British authorities. “This legal battle will be watched carefully by the thousands of small businesses affected by mis-selling who may decide to take a similar route,” said John Walker, chairman of the Federation of Small Businesses, as quoted by Bloomberg.
Despite the relatively positive news, Barclays shares were 3% down in early trading.
On Monday it also became clear that Barclays will have to disclose the names of the staff involved in the Libor rigging.

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