Regulators looking into allegations of manipulation of currency trading have been given assurances that they will receive full co-operation from Barclays, as the scrutiny surrounding its conduct deepens. At the same time, the bank is struggling with a reduction in the income it receives from its investment banking activities.
Recently, Barclays said it was launching a review of its Forex trading stretching back for several years, and was co-operating with the authorities in their investigation over the attempts alleged in the rigging of benchmark rates. Barclays stands alongside UBS, Deutsche Bank and RBS in the scrutiny of Forex trades. Whilst UBS and Deutsche are co-operating with the regulators, the Royal Bank of Scotland is investigating internally the forex processes run by traders.
The latest revelation surrounding forex trades follows a number of investigations that have come the way of Barclays, whose new chief executive Antony Jenkins has faced a torrid time in the 14 months since he took over the bank. Attempts to rebuild the reputation of Barclays have also been hampered by these investigations, while management also looks to streamline the bank’s operations and improve its profits.
Changing things for the better
Jenkins attested that “from time to time these legacy issues will arise and will have to be dealt with.” In talking about the legacy left by previous chief Bob Diamond, Jenkins suggested his staff were “in the process of changing the culture of Barclays. I’ve said it will take five to 10 years to deeply embed that cultural change, and we are on track.”
Jenkins has refused to shed any further light on this probe or any of the other investigations launched by Britain’s financial regulators.
Profits not as badly affected as feared
While Barclays’ latest set of results showed that profits were reduced, they were not as bad as forecasts had feared. The three months ending in September resulted in a pre-tax profit amounting to 1.4 billion, which is a considerable slump from the 1.9 billion achieved at the same time last year. But there was a small crumb of comfort in the news that the profits were slightly better than the 1.3 billion forecast by analysts.
There was worse news in the investments division at Barclays, with profits tumbling to 463 million which was vastly below last year’s figure of 988m, and similarly below the market forecasts.