Barclays banking group, sponsor of football’s Premier League, has reported a big fall in profits.
Statutory pre-tax profits fell 21% to £2.26bn for the year to 31 December 2014.
The group increased its provision to cover any fallout from a probe into currency market manipulation by £750m to £1.25bn.
But stripping out this and other provisions, profits rose 12% to £5.5bn, the bank said.
Boss Antony Jenkins was awarded a £1.1m bonus – his first as chief executive – pushing his total pay package to £5.5m for 2014.
Provision for payment protection insurance (PPI) compensation was increased by £200m for the last three months of 2014, the bank said, taking the year’s total to £1.1bn.
Speaking to the BBC’s Today programme, Mr Jenkins defended his bonus, saying the bank had reduced operating costs by 9% to £18bn and had made a “huge amount of progress.”
Referring to the large amounts set aside to cover legal costs, fines and compensation, he said he was determined the bank would not make the same mistakes again.
Forex fines
In November, UK and US regulators fined six banks a total of £2.6bn for trying to manipulate foreign exchange rates.
HSBC, Royal Bank of Scotland, Swiss bank UBS, and US banks JP Morgan Chase, Citibank and Bank of America, all fell foul of the regulators.
A separate probe into Barclays is continuing.
More than $5tn worth of currencies are traded daily in the foreign exchange markets, dwarfing the stock and bond markets.
About 40% of the world’s dealing is thought to go through London trading rooms.
Mixed picture
While pre-tax profits in the personal and corporate banking divisions rose 29% to £2.89bn, and Barclaycard profits rose 13% to £1.34bn, the investment bank fared less well.
Its profits plummeted 32% to £1.38bn in 2014 as income fell 12%, reflected in a 24% reduction in the bonus pool for its wheeler-dealers.
Chirantan Barua, senior analyst at Bernstein Research, pointed out that Barclays’ investment bank – once the group’s profit-driving engine room – had put in a “a much weaker performance than peers” such as Goldman Sachs and Citigroup.
Credit: BBC