Barclays share price wobbles as FX provision weighs on Q1 profit

Barclays’ (LON:BARC) share price swung between gains and losses this morning, after the British bank released mixed interim results. The cost of settling past misconduct issues continued to weigh on the group’s profitability in the first quarter, according to the update.

Barclays’ profit before tax dropped 26 percent to £1.3 billion in the first three months of the year. Its underlying pretax profit — stripping out additional provisions of £800 million booked to cover possible fines resulting from investigations and litigation primarily relating to foreign exchange rigging, was £1.8 billion. This was nine percent up from a year ago and just above the average forecasts, previously gathered from analysts polled by the company.
Barclays is being probed over the alleged manipulation of foreign exchange markets and reports suggest it could be close to a settlement with British and US regulators. “We are working hard to expedite their settlement and have taken further provisions of £800 million this quarter, primarily relating to foreign exchange,” Chief executive Antony Jenkins said today, without providing any more details on any potential deal. “While we still have much to do, I am pleased with how we’ve begun 2015,” Jenkins added.
Barclays’ common equity tier one ratio — a key measure of financial strength — rose from 10.3 percent in December to 10.6 percent in March. Its leverage ratio — measuring equity to total assets — was stable at 3.7 percent. The lender’s African business recorded strong growth in the first quarter, while the investment bank also did well with rising market volatility boosting revenues from its debt and equity trading operations.
Barclays’ share price plunged at the opening bell this morning, beginning a volatile early trading session. The stock later rose over one percent to then slide again, standing 0.71 percent lower at 259.55p as of 09:45 BST.
As of 10:22 BST, Wednesday, 29 April, Barclays share price is 259.73p.