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Conduct charges push Barclays to €236m loss

By James Sillars, Business Reporter
Barclays dived into the red in the first quarter of the year, as a series of costs pushed the bank to a pre-tax loss of ?236m.
The bank, which reported profits of almost €1.7bn for the same period a year ago, said a €1.4bn settlement with the US government last month and further provisions for the PPI scandal hit its bottom line.
It set aside a further €400m to cover the costs of payment protection insurance mis-selling - dragging profits at its UK business down 17% to €581m.The lender said earnings at its ring-fenced bank for UK retail customers were also curtailed by a 13% increase in credit impairment charges while investment caused a spike in operating costs.Chief executive Jes Staley - who was told last week he faces fines by regulators over alleged attempts to unmask a whistleblower - said the US settlement was the main reason for the profit hit.
Conduct charges push Barclays to €236m loss

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Barclays CEO Jes Staley
"While the penalty was substantial, this settlement represents a major milestone for Barclays, putting behind us a
significant, decade-old legacy matter, " he said.It related to claims the bank mis-sold mortgage-backed securities in the run-up to the financial crisis.RBS is awaiting completion of a similar settlement on the same issue.Barclays said its deal allowed it to focus on moving the business forward in the best interests of shareholders."Together with the extensive restructuring completed last year, Barclays is now well-positioned to deliver strong earnings going forward and remains confident of achieving its returns and cost targets," the statement said.
Shares in the FTSE 100 company closed 1.4% lower.Laith Khalaf, senior analyst at Hargreaves Lansdown, said it reflected dividend disappointment."Beyond litigation matters, Barclays' results were also hampered by a weaker dollar and one-off gains in the first quarter of 2017, making a year-on-year comparison unflattering."The performance of the UK bank was lacklustre, with net interest income falling back despite rising rates."In a reversal of fortune, the investment bank delivered a positive performance, with the equity trading business ticking up thanks to increased market volatility, which clearly prompted some portfolio shuffling amongst investors."Barclays plans to pay a 6.5p dividend this year, which represents a yield of around 3% based on the current share price.
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"That would be a return to where the dividend was before it was halved in 2016, but for income-seekers that still compares unfavourably to what's on offer from Lloyds and HSBC."Barclays therefore has to show some growth credentials to attract investors, and there's not too much evidence of that in its latest trading figures," he concluded.
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