Barclays reports 25% rise in profits

The bank also set aside a further £850 million to cover litigation costs

Barclays has reported a 25 per cent rise in statutory profits to £3.1 billion in the first six months of 2015. Group profits also beat expectations, up 11 per cent at £3.7 billion.

The bank also set aside a further £850 million to cover litigation costs including those for mis-sold payment protection insurance.

The results come just a few weeks since the bank ousted Antony Jenkins as chairman. New chairman John McFarlane is due to set out plans to reform the bank following th results.

The bank had previously set aside £800 million to cover the expense of any further legal action relating to the alleged rigging of foreign exchange markets.

McFarlane took over from Jenkins in on July 8 with a mandate to speed up a turnaround of the bank. He said he would cut costs to around 50 per cent of income and cut non-core assets to £20 billion by 2017.

McFarlane said he would focus on three areas: delivering on strategy, giving more back to shareholders, and improving growth in earnings and capital. "There is more that can be done to deliver better returns for shareholders, faster, and that work has begun under three Group priorities which I have established since becoming executive chairman earlier this month," he said.

Philip Augar, former group managing director at Schroders, told the BBC that Barclays was facing an identity crisis over the future of its investment bank. "Investment banking is volatile and it consumes capital," he said. "There are three options for the investment bank: sell it, fund it full throttle as an investment bank, or shrink the assets to make it sharper and more predictable."