- Barclays adds name to widening currency trading probe, which could become a scandal on a par with Libor manipulation, as it posts rise in profits
The Telegraph
By Harry Wilson
Banking Editor
30 October 2013
Barclays has become the latest bank to admit it is facing an investigation into whether its staff were involved in attempts to manipulate global foreign exchange markets.
The bank confirmed it was reviewing trading activity by its employees for several years, up to as recently as this August, as part of an international inquiry into alleged rigging of currency markets.
Antony Jenkins, chief executive of Barclays, declined to comment further on the probe and said he could not discuss "any ongoing discussions with the regulator".
The Financial Conduct Authority, the UK's market regulator, is currently one of several organisations currently in the early stages of an investigation into the potential rigging. Royal Bank of Scotland has said it is cooperating with the inquiry.
Barclays' admission came as the bank reported its third-quarter results, which showed its statutory pre-tax profits for the last three months had increased by nearly £700m quarter-on-quarter to £351m.
Profits for the first nine months of the year trebled year-on-year to £2.85bn, largely as a result in the reduction of an accounting charge on the value of the bank's own debt.
However, Barclays said its investment banking division had suffered a fall in profits on the back of declining revenues from its core fixed income, currencies and commodities business.
Like its Wall Street rivals, Barclays said revenues in its trading business had fallen compared to 2012, with income from its fixed income, currencies and commodities division dropping by 22pc to £4.5bn. Investment banking profits for the first nine months were down 12pc year-on-year at £2.85bn.
Mr Jenkins said the results demonstrated the "underlying strength" of the bank's business and that the bank was on "the right course". He said: "It is not an easy course, but it is the right one."
He added: "While the resilience of our performance is welcome, I am not complacent, and my executive team know we must push harder in the final quarter and into 2014."
The results are the first since Barclays completed a £5.8bn rights issue that will help the bank meet a new leverage ratio requirement imposed by the Prudential Regulation Authority.
Mr Jenkins said that on top of the capital raising, which will also include Barclays selling £2bn of bonds convertible into its own shares, he had asked the bank's new finance director, former JP Morgan banker Tushar Morzaria, to undertake a review of the structure of the lender's balance sheet.
Barclays also signalled the likelihood of further job cuts as Mr Jenkins pointed to the potential to shrink the bank's workforce through the use of new technology. "Huge swathes of activity can be automated," said Mr Jenkins.
Mr Jenkins gave a cautious welcome to the Government's flagship Help to Buy scheme that will see the state provide mortgage guarantees to home buyers, saying he was "supportive" of the programme. However, he added that, "we want to be careful in the UK about creating some sort of house bubble".
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