Barclays reports 21% fall in pre-tax profit

Barclays has reported a fall in profits as it set aside more funds to cover potential fines for misconduct. Statutory pre-tax profits fell 21 per cent to £2.26billion in 2014. The bank increased its provision to cover any fallout from a probe into currency market manipulation by £750million to £1.25billion.

Stripping out this and other provisions and charges, adjusted profits rose 12 per cent to £5.5billion.

Boss Antony Jenkins was awarded a £1.1million bonus - his first as chief executive. This pushed his total pay package to £5.5million for 2014.

But the bank reduced the overall pool of money allocated for bonuses by 22 per cent to £1.86billion.

Provision for payment protection insurance (PPI) compensation was increased by £200million for the last three months of 2014, the bank said, taking the year's total to £1.1billion.

In November, UK and US regulators fined six banks a total of £2.6billion for trying to manipulate foreign exchange rates.

HSBC, Royal Bank of Scotland, Swiss bank UBS, and US banks JP Morgan Chase, Citibank and Bank of America, all fell foul of the regulators. A separate probe into Barclays is continuing.

More than $5trillion worth of currencies are traded daily in the foreign exchange markets, dwarfing the stock and bond markets.

About 40 per cent of the world's dealing is thought to go through London trading rooms.

Mixed picture

At Barclays, while pre-tax profits in the personal and corporate banking divisions rose 29 per cent to £2.89billion, and Barclaycard profits rose 13 per cent to £1.34billion, the investment bank fared less well.

Its profits plummeted 32 per cent to £1.38 billion in 2014 as income fell 12 per cent, reflected in a 24 per cent reduction in the bonus pool for staff at the business.