Barclays Set Aside £750m for Foreign Exchange Fines
Barclays have announced that they have set aside a further £750 million in order to settle the bill concerning the foreign exchange rigging scandal meaning the total cost will come to nearly £1.3 billion. Barclays have suffered from the fines incurred through their wrongdoing. A further £1.1 billion has been allocated for the compensation they have had to pay out due to their part in mis-selling of payment protection insurance.
However, the bankís chief executive, Antony Jenkins, has stated that the firms is in the healthiest position it has been in since the economic crisis with profits increasing 12% to £5.5 billion in the previous year.
Mr. Jenkins, whose personal pay has now reached £5.5 million after he took his bonus this year, articulated the discontent over the misconduct. He stated that the scandals were ìwholly incompatible with our values. I share the frustration of colleagues and shareholders that matters like these continue to cast a shadow over our business.î
The chief executive sought to allay the anger over bonuses last year by reducing the bonus pool by 22%, down to £1.86 billion from £2.4 billion. Shareholders were outraged during this period after it was declared that Barclays had given out nearly three times more in bonuses than in dividends for the firmís shareholders.
The Institute of Directors criticised the bank over this behaviour last year, posing the question: ìFor whom [is] the institution being run?î
However, the lobby group were far more complementary this week, with their director general, Simon Walker stating: ìThe group as a whole appears to be taking significant steps to change its structure and improve its internal culture.î
Mr Jenkinsí salary is up from the £1.6 million he received in 2013 during the midst of the scandal but he has defended the decision to take his bonus. He commented: ìYou have to look at the very significant progress that we have made in Barclays in the two and a half years that I have been chief executive.î
He defended the record of Barclays under his guidance referring to the cut in costs by £1.8 billion and unburdening the £35 billion of problematic assets related to the bankís ìnon-coreî sector. In addition, the retail branch achieved a 29% rise in profits to £2.9 billion.
However, there is still much scope for improvement with the investment bank seeing profits plummet by 32% to £1.4 billion.
Barclays have cut back on 2,600 jobs in their investment bank for 2014, affecting their offices in New York and London predominantly. Across the entire Barclays Group, 14,000 jobs were removed and more than 8,000 of these were in Britain.