Barclays sets aside $805 million over alleged rigging of foreign exchange markets

LONDON – Barclays, Britain’s second biggest bank by assets, set aside 500 million pounds ($805 million) on Thursday to cover possible penalties amid international probes into the alleged manipulation of foreign exchange markets.

The provision signals ongoing troubles for the bank, which is trying to overhaul its corporate culture after a string of scandals. The provision amount is greater than the 290 million pound fine Barclays paid for its role in rigging the London interbank offered rate, or Libor, a benchmark for consumer interest rates around the world.

Britain’s Financial Conduct Authority is conducting a currency trading investigation that could have broader shockwaves than Libor, as it goes to the integrity of the markets rather than just a single rate. Barclays is separately facing a U.S. investigation into whether it misled other clients by falsely telling them it was taking measures to protect them from predatory high-frequency traders.

Thursday’s announcement came in the earnings report, which showed adjusted pretax profit for the third quarter rose 15 per cent to 1.59 billion pounds, beating analyst estimates.

“The investment bank’s performance in the quarter was disappointing, but we have been able to offset that within the rebalanced group and still deliver good core performance,” Jenkins said in a statement. “We have strengthened capital and leverage, net tangible asset value per share is up, and we continue to drive costs lower.”

Jenkins has spearheaded a culture change at an institution that traces its history back three centuries. He has made restoring trust the centerpiece of his reforms. One of his primary targets has been the investment banking division because of the risky behaviour it undertook before the 2008 financial crisis.

Jenkins has slimmed down operations and pledged to make Barclays “more balanced.”

Some analysts were optimistic about results. Richard Hunter of Hargreaves Lansdown Stockbrokers says Barclays’ recovery is “starting to get traction.”

Barclays’ stock price was down 1 per cent in to 218.05 pence in a weaker market.