Barclays profits up despite scandal

BarclaysEmbattled banking giant Barclays has revealed a potential £450 million bill for mis-selling complex financial products to unwitting small businesses.

Stripping out the provision and other charges, the bank saw its adjusted pre-tax profits rise 13% to £4.2 billion in the six months to June 30.
Barclays was one of four banks which agreed with the Financial Services Authority (FSA) to compensate customers who were mis-sold interest rate hedging products.

Also known as interest rate swaps, the complicated derivatives products may have been sold to businesses as protection - or to act as a hedge - against a rise in rates without the customer fully grasping the risks.

The half-year results report hardly touched on the recent Libor-fixing scandal that engulfed the bank and wider industry, other than to apologise again for recent events.

But the bank did reveal that four present and past senior staff, including current group finance director Chris Lucas, were subject to a new investigation by UK regulators into fees they received under deals made in 2008.

Barclays revealed a 7% jump in staff pay to £5.2 billion, including a 21% rise in deferred bonuses, while staff numbers fell by more than 1% to 139,000.

The bank has endured one of the most turbulent periods in its history after it was fined £290 million by UK and US regulators for manipulating Libor, an interbank lending rate that affects mortgages and loans.

The affair led to the departure of chief executive Bob Diamond, triggered a fierce debate in Westminster over banking ethics and has spawned several closely-watched hearings before the Treasury Select Committee.

Presenting the half-year results in his temporary role as executive chairman, Marcus Agius, who will resign once a successor for Mr Diamond is found, said: "These remain challenging times for Barclays, as well as the industry, and we are sorry for what has happened because of recent events." He added: "I am confident we can and will repair the reputational damage done to our business in their eyes and those of all our stakeholders."

More stories

Read Full Story