Barclays sinks to loss thanks to $2bn US settlement and more PPI costs
Bank reports quarterly pre-tax loss of £236m, down from profits of £1.68bn in the same period last year
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Barclays swung to a loss in the first quarter as further payment protection insurance (PPI) charges and a £1.4bn settlement with the US Department of Justice knocked profits.
The UK bank reported a pre-tax loss of £236m for the three months to 31 March, having reported profits of £1.68bn in the same period last year.
Stripped of litigation and conduct charges, pre-tax profits rose 1 per cent to £1.7bn, while attributable profit came in at £1.2bn.
The bank was hit by a $2bn (£1.4bn) settlement reached with the US Department of Justice earlier this month, related to the sale of mortgage-backed securities in the lead-up to the financial crisis.
Chief executive Jes Staley said: “While the penalty was substantial, this settlement represents a major milestone for Barclays, putting behind us a significant, decade-old legacy matter.”
Barclays booked an extra £400m to cover PPI charges after seeing a higher number of complaints over the quarter.
While the charges affected Barclays’ CET1 levels – referring to the capital cushion that underpins a bank’s loans – Mr Staley said he was confident in the lender’s position.
“This has been a significant quarter for Barclays, one in which we have shown that our new operating model and our portfolio of diversified, profitable businesses are capable of producing improved returns for shareholders.”
Barclays shares initially slumped 1.5 per cent at the start of trading but recovered by mid-morning to around 1.2 per cent.
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “There’s a lot not to like about Barclays’ latest results, although many of the factors hampering the bank are one-off items which don’t speak for the future prospects of the business.
“Stripping out these setbacks, performance has been a disappointment rather than a disaster, which the headline figures by themselves might suggest.”
The PPI charges dragged down returns from its UK business, which suffered a 17 per cent fall in pre-tax profits to £581m, while its international business saw pre-tax profits rise 4 per cent to £1.4bn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments