Barclays can’t move forward until it goes back. The new Chief Executive, Antony Jenkins, is desperate to restore customer and shareholder trust in the bank but the investigations into its past behavior just keep coming. Third-quarter earnings last week were called uninspiring by analysts, but the real action is in the “other legal and regulatory matters” section of the bank’s results.
There, Barclays disclosed two new probes, one by the U.S. Federal Energy Regulatory Commission into alleged energy price manipulation in the western U.S. several years ago, and the other by the U.S. Department of Justice and U.S. Securities and Exchange Commission around its 2008 fundraising from Middle Eastern investors.
The probes tap into investors’ worst fears that Barclays will be fined out of profit by zealous regulators. The U.K. banking giant has taken £2 billion in provisions since last year to reimburse customers who bought faulty payment-protection insurance, and it paid £290 million in June over its role in attempts to manipulate the London interbank offered rate, or Libor. Another £450 million was set aside to repay customers who bought badly designed interest-rate swaps.
Together, those actions helped push Barclays to a £200 million net loss for the first nine months. By Margot Patrick
photo credit: Neil. Moralee via photopin cc
