Barclays Third-Quarter Profit jumps, sets aside FX probe
Barclays Plc (BARC), the U.K.’s second biggest bank by assets, said third-quarter profit unexpectedly rose in the third quarter as the bank set aside 500 million pounds ($799 million) to settle probes into currency markets.
Adjusted pretax profit rose to 1.59 billion pounds from 1.39 billion pounds in the year-earlier period, the London-based bank said in a statement today. That beat the 1.1 billion-pound average estimate of seven analysts surveyed by Bloomberg. Pretax profit in the investment bank dropped to 284 million pounds from 465 million pounds a year earlier.
Chief Executive Officer Antony Jenkins, 53, has set up a bad bank and cut thousands of jobs to make the lender more profitable since the Libor-rigging scandal cost his predecessor, Robert Diamond, his job in 2012.
The shares fell 1.1 percent to 220.50 pence yesterday. They have dropped about 19 percent this year, the second-worst performance among the five largest British lenders.
At 0.6, Barclays has the lowest price-to-book ratio, a measure of market price versus equity, among the largest five British lenders. That compares with Royal Bank of Scotland Group Plc’s ratio of 0.7, HSBC Holdings Plc (HSBA) at 1 and Standard Chartered Plc at 0.8, data compiled by Bloomberg show.
The bank could face as much as 1.2 billion pounds in conduct charges this year, said Chirantan Barua, an analyst at Bernstein in London. His estimate includes a 700 million-pound charge to settle a foreign-exchange probe with regulators and a further 200 million pounds relating to a U.S. investigation into its private-trading venue, known as a dark pool.
Barclays is among banks including Citigroup Inc., RBS and UBS AG (UBSN) in discussions with the U.K.’s Financial Conduct Authority that may lead to a settlement of the regulator’s probe into currency rigging as soon as next month, according to people with knowledge of the matter.
UBS said on Oct. 28 it’s in talks with U.S. authorities about alleged foreign-exchange manipulation, while setting aside 1.84 billion Swiss francs ($2 billion) for litigation provisions. Deutsche Bank AG, Germany’s largest lender, swung to a loss in the third quarter after setting aside 894 million euros ($1.1 billion) to cover the costs of settling probes.
Source: bloomberg-Barclays Third-Quarter Profit jumps, sets aside FX probe
