Barclays Profits Slump After £290m Foreign Exchange Charge

Barclays Profits Slump After £290m Foreign Exchange Charge
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Barclays' third quarter profits fell around 10% as it revealed a £290 million foreign exchange charge.

Shares were down more than 5% in early trading as the banking giant announced pre-tax profits of £1.43 billion for the three months to September, down £160 million from the same period last year.

The bank revealed it was facing a £290 million redress as a result of an internal review, relating to customer foreign exchange transactions between 2005 and 2012.

Longer term, the bank revealed adjusted pre-tax profit for the nine months to the end of September lifted 5% to £5.2 billion thanks to strong growth across its core units, such as private and corporate banking and its Barclaycard operations.

The results come a day after Barclays confirmed the appointment of Jes Staley as its new boss. Having spent three decades at JP Morgan, his appointment is expected to signal a renewed focus on its investment banking.

Richard Hunter, head of equities at Hargreaves Lansdown, described the results as "something of a curate's egg" as Barclays continues to reposition itself as a more streamlined bank.

He added: "There are some promising signs within most of the key metrics, such as the return on equity, a comfortable capital cushion and a further reduction in impairments.

"By business, Barclaycard has performed strongly in terms of income and profit in the year to date, whilst the Investment Bank has also notably improved in the period.

"The strategic direction of the latter remains unclear, however, with the new chief executive already having commented on its necessary transformation to a less capital intensive model, even before he has taken up the reins."