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Barclays reports 25% increase in profits against backdrop of redress provisions

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  • 29/07/2015
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Barclays reports 25% increase in profits against backdrop of redress provisions
Barclays reported a 25% increase in profit before tax to £3,114m despite increasing its provisions for UK customer redress and investigations largely related to the forex rigging scandal.

Its half year results showed a 15% increase in money set aside for customer compensation from £900m in H1 2014 to £1,032m this year which the bank said was based on redress it expected to pay in the future. An £800m provision was made for the forex investigation and litigation costs.

Executive chairman John McFarlane replaced chief executive Antony Jenkins who was sacked from Barclays earlier this month.

The Barclays board ejected Jenkins from his position as CEO stating they needed someone with a new set of skills to lead the group for the period ahead.

In the financial update statement, McFarlane said: “Barclays today has a good portfolio of businesses. However, we need to accelerate the execution of the strategy. 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.”

The three priorities are to focus on its core franchises of UK personal and commercial banking, investment banking in Europe and the US, its cards business and Africa; accelerate the delivery of shareholder value and embed a culture of high performance and enhanced values.

“We need to be much more customer and client orientated in our approach, to streamline and eliminate unnecessary and cumbersome bureaucracy, and to embed direct accountability for activities within our businesses,” said McFarlane. “Crucially we must do this in a way which is consistent with our values and with strong controls in place so that we build this business in the right way. There is a lot we can do to accelerate our progress and the work has already begun.”

Two weeks after the departure of Jenkins, Andy Gray managing director of mortgages, resigned from his post and will be succeeded by Raheel Ahmed, global head of strategic transformation retail clients at Standard Chartered.

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