BARCLAYS yesterday increased its provisions to cover two mis-selling scandals by a further £1 billion.
The banking giant said it will set aside a further £600 million to cover mis-sold payment protection insurance (PPI), taking the current total to £2.6bn.
In the wake of the City watchdog’s study into interest rate swap products sold to small and medium-sized businesses, Barclays said it will also increase its provision to cover claims by £400m to £850m.
The news came just hours before the bank’s new chief executive, Antony Jenkins, told MPs he was “shredding” the legacy left by his predecessor Bob Diamond as he also confirmed bonuses will be slashed.
Jenkins, who is waiving his own bonus for 2012 after a “very difficult” year for the scandal-hit bank, told the Parliamentary Commission on Banking Standards that he repeatedly raised concerns with the board and Diamond over the culture at the bank while he was in charge of its retail banking division.
In a tense hearing, Jenkins assured MPs that he was taking action to address the “aggressive” and “self-serving” culture under Diamond.
He said the bonus pool for 2012 had already been “substantially” reduced following a scandal-hit year that saw the bank’s reputation battered by the Libor rate-rigging affair.
The group said the hike in provisions for compensation for mis-selling of PPI and interest rate swap products to small businesses had resulted in a “material” cut to the bonus pot.
Barclays has yet to reveal how much its overall 2012 bonus pool will be, but is expected to give details alongside the company’s full-year results next Tuesday.
Meanwhile, the lender announced yesterday that Diane de Saint Victor, general counsel for engineering giant ABB, would join the board as a non-executive director in March.
Chairman David Walker said that other appointments were in the pipeline as he looks to shake-up the bank after a string of scandals. Shares in Barclays closed up 3.75p at 295.25p.