PPI and US legal charges bite Barclays profits

By Wale Azeez, business reporter
The spectre of the PPI scandal continued to haunt Barclays into the half year, after the banking group took at ?400m charge to its balance sheet in the first quarter .
The group was also hit with a charge for its €1.4bn legal settlement with US authorities, over its sale of mortgage-backed securities in the lead-up to the financial crisis.
Barclays reported a 29% fall in group pre-tax profit to €1.7bn for the six months to 30 June, having been knocked by charges in the first quarter.Excluding those costs, Barclays half-year group pre-tax profits rose 20% to €3.7bn.Total income for the six months was flat at €10.9bn.Barclays said the second quarter was its most profitable in more than three years, having taken no material litigation and conduct charges, PPI provisions or exceptional adjustments this period.Statutory pre-tax profits for the period came in at €1.9bn, up from just €659m during the same period last year.Total group income for the second quarter rose 10% to €5.6bn.Chief executive Jes Staley said that period was the "first quarter for some time with no significant litigation or conduct charges, restructuring costs or other exceptional expenses which hit our profitability".
PPI and US legal charges bite Barclays profits

Jes Staley said the results show the bank beginning to show its true potential
He added: "In effect then, it is the first clear sight of the statutory performance of the business which we have re-engineered over the past two and a half years - Barclays' transatlantic consumer and wholesale bank - and it is a positive sight."The numbers we have posted strengthen our confidence that Barclays can deliver attractive and sustainable profits, and in our ability to return a greater proportion of those profits to shareholders over time."In July, the Serious Fraud Office (SFO) filed to the High Court to reinstate dismissed charges against Barclays from 2017.The watchdog had accused the bank of two offences of conspiring to commit fraud, relating to services agreements with Qatar Holding in 2008.Barclays also faced a charge of unlawful financial assistance in connection with a $3bn Qatar loan to the bank.The banking group said it would "defend" any new SFO case over the Qatar fundraising.
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Laith Khalaf, senior analyst at Hargreaves Lansdown said:" Barclays is moving in the right direction, but the champagne needs to be put on ice until the bank can deliver some consistency in its performance."Barclays isn't entirely out of the woods on litigation yet either. PPI claims have just over a year left to run and we wouldn't be surprised to see some additional costs as consumers react to the deadline."
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