Barclays sets aside £290m for foreign exchange compensation 

Provision for customers takes Barclays’ legal bill to £2.3bn in nine months, as critics say latest move does little to restore company’s tarnished reputation

Barclays is embroiled in yet another scandal after admitting it expects to pay £290m to compensate customers for the rates they were charged on currency deals.

The bill, which took its legal and compensation costs to £2.3bn in the first nine months of the year, was revealed just 24 hours after its new boss, investment banker Jes Staley, pledged to clean up the bank’s reputation.

Barclays declined to give any detail about the latest scandal, but the City regulator said it was aware of the new problem at the bank. The finance director, Tushar Morzaria, said it followed an internal review of foreign exchange transactions between 2005 and 2012, when the bank believed it had not been applying appropriate rates. He declined to say whether corporate or retail customers were affected or if they had already received compensation.

The Financial Conduct Authority said it was “aware of the issues and [we] are liaising with the firm on this matter”.

The £290m is part of £1.3bn set aside for compensating customers in the first nine months of this year. A further £1bn is earmarked for ongoing investigations and litigation, including £270m for two claims relating to the sub-prime mortgage crisis in the US.

In the third quarter, there was no additional provision for payment protection insurance mis-selling but the new charge follows a wave of scandals at Barclays, which has been hit by fines for rigging currencies and interest rates.

The Robin Hood Tax campaign, which is calling for taxes on banks, said: “Setting aside another massive provision for scamming its customers does little to restore faith in Barclays’ tarnished reputation.”

The figures were contained in the nine-month results, which set out the challenges facing Staley. He is on a £10m pay packet and will start on 1 December, earlier than expected.

Barclays’ shares sank more than 5% to 239p after the results were released on Thursday morning. Nine-month profits rose 7% to £3.9bn and the bank focused on underlying profits of £5.1bn, a 4% increase, although the City reacted to the fall in the profits in the third quarter.

Source: The guardian  – Barclays sets aside £290m for foreign exchange compensation

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