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
News
Tepper had a stunningly successful career as a songwriter
people
Arts and Entertainment
Len Blavatnik
music
Sport

Today in the Premier League, Everton face Manchester United, and Arsenal take on Chelsea at the Emirates Stadium. A victory for Jose Mourinho's side, and they could win the Premier League title as soon as Wednesday with a win over Leicester.

Arts and Entertainment
tv
News
The original field in High Wycombe, which is used as the banner image on a number of websites belonging to local Tory associations
general election
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions