Barclays in the red after legal fights

LONDON: Barclays fell to a loss last year after being dragged down by charges related to potential fines and litigation costs for conduct by its employees. It also posted lower income in its investment bank as it continues to shrink that business.

Barclays’ annual results included £2.8 billion (US$4.3 billion) in litigation and conduct charges.

The bank opted not to settle in November when a group of the world’s biggest banks agreed to pay a combined $4.25 billion to end investigations by British, Swiss and US authorities, who accused them of conspiring to manipulate currency markets. Barclays still faces inquiries by authorities in Britain and the US.

The bank’s fourth-quarter results also included an additional £200 million in charges related to the improper selling of payment protection insurance, a product that has cost British banks billions of pounds in redress in recent years.

Barclays set aside about £1.1 billion for the loan insurance payouts and other customer compensation in 2014.

Among a laundry list of legal disclosures in its annual report, Barclays also said it had been providing information to the US Justice Department in connection with an inquiry into “precious metals and precious metals-based financial instruments”.

For the year that ended Dec 31, Barclays reported a net loss of £174 million compared with a profit of £540 million in 2013. Excluding legal provisions and other onetime charges, Barclays said its full-year pretax profit had risen 12% to £5.5 billion from £4.9 billion pounds in 2013. The adjusted results exceeded analysts’ expectations.

“We remain focused on addressing outstanding conduct issues, including those relating to foreign exchange trading,” said chief executive Antony Jenkins.

“I regard the behaviour at the centre of these investigations as wholly incompatible with our values, and I share the frustration of colleagues and shareholders that matters like these continue to cast a shadow over our business. But resolving these issues is an important part of our plan for Barclays.”

The bank’s bonus awards for 2014 declined 22% to £1.86 billion.

Mr Jenkins received total compensation of £5.47 million in 2014, including a bonus of £1.1 million.