By Margot Patrick
LONDON-- Barclays PLC on Tuesday raised its provision for
potential foreign-exchange settlements to GBP1.25 billion ($1.92
billion), leading it to report a full-year net loss, but said an
effort to shrink and restructure its business is starting to pay
off.
Chief Executive Antony Jenkins said the bank is in its best
shape since the financial crisis, with a stronger capital base and
falling operating costs. Barclays cut around 5% of its workforce
last year, to 132,300 from 139,600. More than 2,000 of the cuts
were in Barclays's investment bank, and a further 5,000 of the
remaining 20,500 investment banking jobs are set to go over the
next two years.
Mr. Jenkins told the British Broadcasting Corp.'s Today program
that he felt justified in accepting a GBP1.1 million bonus for 2014
because of the progress. He had turned down a bonus last year in
part because of the costs of past misconduct. Conduct and
litigation charges rose 15% in 2014, to GBP2.8 billion from GBP2.44
billion, including a fresh, GBP750 million provision in the fourth
quarter for a global investigation into foreign-exchange
markets.
Barclays along with around a dozen banks is being probed for
alleged manipulation in the foreign-currency market. A group of six
banks were fined $4.3 billion in November by regulators in the
U.S., U.K. and Switzerland.
"I share the frustration of colleagues and shareholders that
matters like these continue to cast a shadow over our business,"
Mr. Jenkins said in a statement alongside the bank's annual
results.
"Resolving these issues is an important part of our plan for
Barclays and, although it may be difficult, I expect that we will
make significant progress in this area in 2015," he said.
Still, uncertainty around potential settlements and final costs
helped send Barclays shares 3% lower in early trading in
London.
Barclays said last year's job cuts helped reduce costs in the
year by GBP1.8 billion, pushing adjusted pretax profit for the year
up 12% to GBP5.5 billion from GBP4.9 billion. The bank posted a
GBP1.68 billion net loss in the fourth quarter, bigger than a
GBP642 net loss in the last three months of 2013, largely because
of a revaluation of loan portfolio held in its noncore
division.
Provisions and charges resulted in a full-year net loss of
GBP174 million, compared with a GBP540 million net profit in
2013.
Analysts said the results showed the bank is making good
progress on its strategy. Mr. Jenkins started his cost cutting
effort two years ago and stepped up the plan last year by taking an
ax to the investment bank.
"The key to the outlook will be how quickly Barclays can settle
the outstanding legacy misdemeanors that it continues to provision
fines for, " said Lewis Sturdy, a dealer at London Capital
Group.
Among a long list of legal issues, Barclays said another,
unnamed regulator is looking at aspects of a continuing
investigation by U.S. and British prosecutors over a deal Barclays
struck with a Qatari investment vehicle while raising funds in
2008.
The bank said it is also providing information to the U.S.
Department of Justice as part of the agency's investigation into
precious-metals markets.
Write to Margot Patrick at margot.patrick@wsj.com
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