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Barclays Increases Provisions

PPI scamBarclays has had to put aside another £1bn as it braces for another round of fines, this time for rigging foreign exchange markets and for further PPI mis-selling.

The bank is indicating it expects to face penalties of at least £2bn in fines and penalties in both the UK and the US. Investigators are looking into the manipulation of the £3.5tn-a-day forex markets. Many of the major banks have already been fined a combined £2.6bn for the same offences, but Barclays pulled out of the settlement at the last minute.

Broken down- the charges equate to £800m for currency market manipulation and a further £150m, for further PPI claims. This resulted in a huge 26% fall in profits in the first three months of the year.

The bank now has a provision of a £2.5bn for; legal, compliance and regulatory matters, £2bn of which is now related to foreign exchange markets.

The annual report lists a string of potential legal issues including investigations into precious metals markets, the sale of mortgage bonds before the PPI scam and the ongoing dispute with the FCA. The annual report says also investigation is an inseparable factor in deciding all factors related to prevent scam and dispute case in the court.

 

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