Barclays boss warning over pain of low interest rates

BARCLAYS has set aside an extra £600m to deal with complaints over PPI – as its boss warned that ultra-low interest rates were hurting savers.

The bank made an £837m profit in the three months to September 30, up 35pc on the same period last year and far ahead of analysts’ expectations.

But it was forced to set aside extra cash to cover the costs of mis-selling payment protection insurance, taking its total bill for the scandal to £8.4bn.

Bosses hope this will see them through to mid-2019 when the deadline for submitting complaints passes.

Despite this extra charge, the company’s share price rose 4.8pc, or 8.7p to 190.5p as the results were cheered by investors.

Chief executive Jes Staley said performance had held up well since the Brexit vote and stressed he was committed to the UK. He warned lower rates were hurting savers – backing up Theresa May’s criticisms at the Conservative Party conference earlier this month.

Staley said: ‘With low interest rates, some benefit but some also pay a cost for it. And I think all of us would like to see economic growth in the UK that would allow a normalisation of interest rates which would allow savers to get a fair return on their investment.’

May’s comments were seen by some as an attack on the Bank of England, which cut rates to a historic low of 0.25pc.

Low rates make it harder for lenders to turn a profit – and have had an impact on Continental giants such as Deutsche Bank, which has seen its share price more than halve in the last 12 months.

Deutsche surprised markets yesterday by posting profits of £248m in the third quarter having made a £5.4bn loss a year earlier.

At Barclays, the better-thanexpected results were partly driven by the corporate and investment bank, which saw profits more than double.

This division has a strong focus on America where it earns money in dollars. It also benefited from a boom in bond trading.

The results will be seen as a vindication for Staley, who had been under pressure to cut down the investment bank after years of poor performance.