Barclays has taken a 750 million pound ($1.2 billion) charge in the fourth quarter as it prepares to settle allegations its traders manipulated the foreign exchange market. As Hayley Platt it overshadowed the bank's efforts to slash costs and boost profits.
Barclays is on a mission to improve its bad boy reputation but it's a slow and costly process. The British bank has set aside an extra 750 million pounds in the fourth quarter as it prepares to settle allegations its traders manipulated foreign exchange markets. The extra charge turned a 12% rise in annual profits into a 21% fall Simon Smith is from FX Pro. SOUNDBITE: Simon Smith, chief economist, FxPro, saying (English): "Banks have been a lot more proactive in terms of their reaction to what's gone on in FX markets in contrast to Libor, so they've been certainly been keen to move ahead of regulators settle early if they can just to be sure they're not seen to be dragging their feet on this." Antony Jenkins promised to change the culture at the bank when he took over in 2012. He cut costs and scaled back on the investment business. But past conduct problems continue to dog the bank. Despite that Jenkins is taking his first bonus of 1.1 million pounds. SOUNDBITE: Simon Smith, chief economist, FxPro, saying (English): "Longer term if they're delivering on that reform process at some point they need to be remunerated for that so I think that's a question more for shareholders and the remuneration committee. But in terms of the culture change which is the most important thing when he came in, that seems to be happening slowly but surely." Six major banks were fined more than $4 billion for their role in the foreign exchange scandal last year. And the UK legislator says the Bank of England's probe into the conduct was too soft. The bank's governor Mark Carney doesn't agree. SOUNDBITE: Mark Carney, Governor Bank of England, saying (English): "The original Grabiner report was thorough, was comprehensive. He had access to millions of documents, to everyone in the Bank of England. He had close cooperation with the FCA and he formed his judgements and conclusions, including recommendations for changes to policies and procedures at the Bank of England on which we have acted." Barclays shares were among the top fallers in a flat European banking sector. The 3% drop reflecting the fact that Barclays has now increased its total litigation provision by 250 percent to a sky high 1.7 billion pounds.