Barclays takes £300m hit on mis-sold PPI claims

 

Banking giant Barclays took an additional £300 million hit to cover payment protection insurance mis-selling claims today but unveiled a higher-than-expected rise in quarterly profits.

The bank has now set aside £1.3 billion to deal with PPI compensation after a recent increase in the number of claims, which have eaten into the profits of its UK arm.

However, stripping out the cost of PPI and other one-off costs, the bank reported a 22 per cent rise in pre-tax profits to £2.4 billion - against City expectations of around £2 billion - as the UK's retail banking division and Barclaycard performed well.

Barclays chief executive Bob Diamond has been in the spotlight recently over his £17.7 million pay package for 2011, which is expected to come under increased scrutiny at the bank's annual meeting tomorrow despite recent moves to quell a shareholder rebellion.

Santander UK also released its first quarter results, which showed pre-tax profits falling 40 per cent to £347 million amid a challenging economic environment, low interest rates and higher funding costs.

Barclays reported a 5 per cent increase in total group income to £8.1 billion, which included a 3 per cent rise in income at its investment bank Barclays Capital.

UK retail banking - all business directly with consumers such as current accounts - saw underlying pre-tax profits rise 16 per cent to £334 million.

Barclays said it issued gross new lending of £10.1 billion to households and business, which was flat on the previous year.

The bank also raised £1.5 billion of loans under the Government's National Loan Guarantee Scheme - the so-called credit easing initiative designed to reduce the cost of credit for small businesses.

The group held its quarterly dividend at 1p a share.

The hit from bad debts was reduced by 16 per cent to £778 million in the quarter, while it also cut its exposure to troubled eurozone countries Portugal, Ireland, Italy, Greece and Spain by 16 per cent to £6 billion.

Barclays made no reference to the furore surrounding Mr Diamond's pay, which has been brewing in recent weeks, in its first quarter update.

Last week, Mr Diamond agreed not to receive half of his £2.7 million all-shares bonus award for 2011 if certain performance targets are not met within three years.

But the move did not address previously awarded long-term incentives and a £5.7 million tax payment made on Mr Diamond's behalf.

While major investor Standard Life welcomed the concession and said it would now back the bank's remuneration report, many shareholders are still expected to raise their opposition at tomorrow's meeting.

The Institute of Directors (IoD) yesterday added to the growing voice of concern as its director-general Simon Walker said bonuses at Barclays were too high and that the bank should not be run "for the benefit of its top executives".

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore