Forex manipulation allegations continue to hang over Barclays as the bank sets aside even more cash for potential settlements, meanwhile new lender TSB does brisk business on the British high street. Sara Hemrajani reports.
The spectre of regulatory action continues to hang over Barclays. The British lender has revealed it's set aside an extra 800 million pounds to cover potential fines for alleged foreign exchange manipulation. That brings the total amount of provisions to 2 billion pounds - and there's still no settlement in sight. CEO Antony Jenkins's efforts to overhaul the business and boost earnings have been hampered by ongoing probes. Under his watch, Barclays is working to shrink its investment banking division in favour of a return to its retail roots. But although the company's latest profit figures are in line with analysts' expectations, past misconduct issues may weigh on Jenkins for some time to come. Steve Slater is Reuters European banking correspondent. SOUNDBITE: Reuters European banking correspondent, Steve Slater, saying (English): "He's streamlined the bank, he's made it less reliant on investment banking. He's trying to cut costs by cutting about 19,000 jobs. All of those measures seem to be working and it's moving in the right direction, but it's just taking a long time, and it'll probably take a period of several years to get past all of these legacy issues that are hurting the bank." Barclays shares dropped more than 3 percent following the announcement and investors may be bracing themselves for an even bigger hit. Jasper Lawler is from CMC Markets. SOUNDBITE: CMC Markets analyst, Jasper Lawler, saying (English): "Shareholders have to look at the underlying performance of the bank but these fines look like they're going to continue. And 2015, many are predicting, could be one of the largest and worst years yet in terms of the actual dollar value of these fines." The picture is looking brighter for new lender TSB. It was hived off from Lloyds Banking Group last summer. TSB reported higher first-quarter profit thanks to increased mortgage applications and new customers. It's already agreed to be taken over by Spain's Sabadell, which aims to grow TSB into a potent challenger to Britain's high street banks.