Barclays in currency trading investigation

Barclays revealed it had been drawn into a worldwide investigation into alleged manipulation of currency rates

Barclays Bank
Barclays Bank

Barclays revealed it had been drawn into a worldwide investigation into alleged manipulation of currency rates as it reported profits from its investment banking arm fell by half in the third quarter.

It said a number of regulatory and enforcement authorities were investigating foreign exchange trading, including attempts to manipulate benchmark exchange rates.

Barclays said it was co-operating and was reviewing its foreign exchange trading over a period of several years to August this year.

The group reported total profit before tax for the period down by 26% to £1.38bn compared to the same period last year - though statutory profits, when some accounting provisions are included, were up sharply.

Barclays said pre-tax profits from its investment bank dropped by 53% to £463mn.

Lower activity was driven by uncertainty about when the US Federal Reserve would start slowing its quantitative easing programme that is pumping billions of dollars into the economy every month.Profits from UK retail and business banking were 2% down at £351m.

Meanwhile, the bank said that provision for mis-selling payment protection insurance remained unchanged. It has £1.26bn left of a £3.95bn pot set aside to cover compensation schemes.

The latest investigation into rate-fixing comes after Barclays paid £290m in fines to US and UK regulators in June last year over the manipulation of Libor and Euribor interbank rates, in a scandal that claimed the scalp of chief executive Bob Diamond.

New boss Antony Jenkins, appointed last summer, launched a crusade to overhaul the culture of the bank, with a major restructuring programme called Transform that has cost £741m so far this year. But its reputation has taken further blows after it revealed it was facing a £50m fine over claims it acted recklessly in its multibillion-pound bailouts from Qatar in 2008.

In its latest trading update, it said: “Various regulatory authorities have indicated they are investigating foreign exchange trading, including possible attempts to manipulate certain benchmark currency rates or engage in other activities that would benefit their trading positions. Barclays Bank has received enquiries from certain of these authorities related to their particular investigations, is reviewing its foreign exchange trading covering a several year period through August 2013.”

Elsewhere in the report, Mr Jenkins said the group was “well-positioned to take advantage of improvements in the global macro environment”.

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