Connect with us

Hi, what are you looking for?

NewsTimes.co.uk

MONEY

Barclays makes further provision for scandals and cuts costs

Barclays set aside £1.8bn in the first half of the year to compensate customers for a string of mis-selling scandals and fines.

The figure was revealed as John McFarlane, the chairman who is standing in as chief executive following the ousting of Antony Jenkins earlier this month, pledged to accelerate the disposal of risky businesses, cut costs at the scandal-hit bank and also scale back the dividend policy.

Included in the provision is a further £600m for the payment protection insurance mis-selling scandal and £250m to compensate customers with packaged bank accounts that had other products, such as insurance, attached to them. Also included are fines for rigging the foreign exchange markets.

Even so the bank said its first-half profits had increased 25% to £3.1bn. McFarlane set out his priorities for the bank, which appeared to include a commitment to the investment bank, where he said he was pleased with the performance.

Profits in the investment bank – the powerhouse of the business until the 2012 Libor rigging scandal forced a rethink of the operation – rose 36%, faster than any other division.

McFarlane said there would be “increased focus on our core franchises: what we are good at, where we are good at it and what is financially compelling to us”.

“That means aligning our effort and investment behind our key franchises of UK personal and commercial banking, investment banking in Europe and the US, our cards business, and on Africa. We will also act quickly to curtail activity which is marginal or which will not deliver the return on equity we require,” he said.

The plan put in place by Jenkins to cut the non-core division to £50bn by 2016 has been increased to £20bn in 2017. The cost-income ratio – a measure of efficiency – is to fall to the “mid-50s” from 70% now – a move that could raise fears about further job cuts on top of 19,000 announced year ago. The bank’s finance director, Tushar Morzaria, attempted to play down such concerns, saying there were no new job cuts to be announced and the focus was on the efficiency of the company.

Advertisement. Scroll to continue reading.

Morzaria refused to comment on whether he was a candidate to replace Jenkins, with whom he had been involved in devising the strategy for the bank in the wake of the Libor rigging scandal in 2012. Morzaria joined Barclays in October 2013 in the midst of an overhaul of the bank and a scaling back of its investment banking operations.

The City is awaiting further details from McFarlane about the future ambitions for the investment bank.

The Barclaycard business reported record profits of £795m while the high street operations reported a 4% rise in profits to £1.5bn.

The dividend is being set a 6.5p – the same as last year – and McFarlane is scaling back promises made by his predecessor.

Source: https://www.theguardian.com

You May Also Like

UK NEWS

Professing to be the lead in Thai relationship with over 1.5 million enrolled single people, Cupid Media’s ThaiCupid brings the one in every of...

UK NEWS

Read more about switzerland women here. Swiss ladies and men are not reknown for being the most chatty, outgoing or spontaneous when meeting strangers...

FOOD TIPS

In food, if there is one thing you can say without fear of contradiction, it is this: Britain loves burgers. The UK market is...

WORLD NEWS

An exclusive article form Orestis Karipis In the 1930’s and 1940’s acid was the weapon of deceived husbands and wives in the Western world...

Copyright © 2020 NewsTimes.co.uk All Rights Reserved