Barclays sees ‘encouraging’ start to year

But a £2.62bn accounting adjustment and an additional £300m set aside for settling claims of mis-selling payment protection insurance hit the bank reports The BBC.

It reported a statutory pre-tax loss of £475m in the first quarter, compared with a £1.66bn profit a year ago.

But stripping out the impact of these, it made a profit of £2.45bn, which was ahead of analysts’ forecasts of £2bn.

It said that profit had been driven by “strong performances in both retail and business banking and corporate and investment banking, with the non-investment bank businesses showing significant growth in adjusted profits”.

Barclays holds its annual general meeting on Friday, where shareholders will vote on a pay deal for chief executive Bob Diamond and other senior executives.

Between a quarter and a third of investors are expected to vote against the deal.

The £2.62bn debt valuation adjustment refers to a loss Barclays would make if it had to buy back its own debt now. It is an accounting technique and not a physical loss.

The increase in PPI provisions came after the bank set aside £1bn last year to cover mis-selling claims.

PPI is supposed to cover borrowers’ loan repayments if they fall ill, die, or lose their jobs. But it became highly controversial and there were years of campaigning by consumer groups against the widespread mis-selling of the policies.

“Barclays first-quarter results are an encouraging start to the year and demonstrate continued progress across our execution priorities,” said Mr Diamond.

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