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Barclays sets aside £500m for forex investigation

Barclays has set aside £500m in anticipation of the outcome of investigations into foreign exchange trading.

The bank’s quarterly interim management statement reveals it has also made a £170m provision against a “best estimate” cost of PPI compensation payments, and £160m for interest rate hedging redress.

In October 2013, the FCA announced it was investigating a number of firms relating to foreign exchange trading and in July this year the Serious Fraud Office launched a criminal investigation into alleged rigging of foreign exchange markets.

Bank of England governor Mark Carney has previously said he expected forex rigging to be bigger than the Libor scandal.

Group pre-tax profit increased 5 per cent in the year to September, from £4.7bn last year to £4.9bn this year.

But the investment banking division’s pre-tax profits fell 38 per cent year-to-date, from £2.2bn in 2013 to £1.3bn this year.

Group chief executive Antony Jenkins says the investment bank’s performance was “disappointing”.

He says: “These results, with a 5 per cent increase in profits before tax, show further steady progress towards our transform financial commitments for 2016, and demonstrate how our strategic decision to rebalance Barclays has created greater resilience in the group.

“Our core businesses – the future of Barclays – have delivered an ROE of 10.5 per cent, driven by our powerhouse personal and corporate banking business and continued strong growth in Barclaycard. The strength of our Africa Banking franchise is clearly visible despite currency headwinds.

“The investment bank’s performance in the quarter was disappointing, but we have been able to offset that within the rebalanced group and still deliver good core performance.”


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