Barclays takes extra $1.2 billion hit for potential forex settlements

Wed Apr 29, 2015 6:24am EDT
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By Steve Slater and Matt Scuffham

LONDON (Reuters) - Barclays (BARC.L: Quote) set aside another 800 million pounds ($1.2 billion) on Wednesday to cover potential settlements for alleged foreign exchange manipulation, hitting profits and reflecting its struggle to put past problems behind it.

Barclays said it had now set aside 2.05 billion pounds ($3.2 billion) to cover any settlement, but offered only limited clues on how soon a deal might come.

U.S. and British authorities are investigating the allegations. Barclays pulled out of a settlement between some authorities and six rival banks in November because it had not reached a deal with New York's regulator.

"That (extra provision) reflects the further discussions we've been having with a number of regulators and agencies around the world across multiple jurisdictions," Finance Director Tushar Morzaria told reporters.

Barclays wanted to settle the allegations with as many agencies as possible in one go and Morzaria said the bank did not regret pulling out of the earlier settlement.

New York's banking regulator has said it could reach a deal with Barclays next month if it excluded a probe of the possible rigging of rates through computer programs. It could take several more months if that trading is included.

Barclays could settle next month with a host of regulators, and leave any settlement with New York's regulator on computer trading until a later date.

Barclays also set aside another 150 million pounds for compensating customer mis-sold insurance products in Britain, which has now cost Barclays 5.4 billion pounds and all British banks more than 26 billion.   Continued...

The Barclays logo is brightly lit on their building in Times Square, Manhattan, New York in the early hours of January 18, 2015.    REUTERS/Carlo Allegri