Barclays share price opens lower as lender hikes forex provision
Shares in Barclays Plc (LON:BARC) have slipped into the red in early morning trading after the blue-chip lender increased its provision for potential fines resulting from a probe into currency market manipulation by as much as £750 million. The company, however, posted a 12 percent increase in full-year profits, surpassing analyst estimates.
As of 08:06 GMT, Barclays’ share price had shed 0.80 percent to 260.65p. The shares are underperforming the benchmark FTSE 100 index which currently stands 0.19 percent higher at 6,953.86 points.
Barclays announced in a statement today that its adjusted profit before tax had increased 12 percent to £5.5 billion last year, beating forecasts of £5.3 billion. The adjusted figure, however, does not reflect the additional provisions for litigation, with Barclays announcing that it had set aside an extra £750 million to cover potential fines amid ongoing investigations into allegations of rigging foreign exchange markets, bringing the total forex provisions to £1.25 billion. Provision for payment protection insurance (PPI) compensation was increased by £200 million for the last three months of 2014.
Taking the provisions and other adjustments into account, Barclays’ profit before tax on a statutory basis dropped 21 percent to £2.26 billion.
Barclays’ chief executive Antony Jenkins who has been trying to restore to the lender’s reputation following a number of scandals including Libor, said that the company remained “focused on addressing outstanding conduct issues”.
“I regard the behaviour at the centre of these investigations as wholly incompatible with our values, and I share the frustration of colleagues and shareholders that matters like these continue to cast a shadow over our business,” he added.
Jenkins took an annual bonus of £1.1 million, pushing his overall pay package to £5.5 million. Speaking to the BBC’s Today programme, Jenkins defended his bonus, saying that the bank had reduced operating costs by nine percent to £19 billion and had made a “huge amount of progress”.
As of 08:47 GMT, Tuesday, 03 March, Barclays share price is 257.35p.