Barclays ups PPI bill by £900m as profits fall

Banking giant Barclays has suffered a fall in first-half profits following a drop in earnings at its investment bank, and said it has set aside a further £900 million to cover claims for mis-sold loan insurance.

The group reported a 7 per cent fall in adjusted pre-tax profits to £3.3 billion for the six months to the end of June, with profits at its investment banking arm almost halving to £1bn.

Barclays chief executive Antony Jenkins said in May that the bank would be cutting 2,000 jobs this year and a further 5,000 by 2016 at the investment division, where huge bonuses fuelled public and shareholder anger.

Jenkins said today: “Performance in the investment bank was impacted by the repositioning underway as well as difficult trading conditions in the quarter, but it is where we expected it to be at this point.”

Barclays also revealed today that it has set aside an extra £900m to meet the cost of compensating customers who were mis-sold payment protection insurance (PPI). This took the bank’s total PPI provision to more than £3.5bn.

However, Jenkins said he was encouraged by the group’s personal and corporate banking division and progress in reducing assets at its non-core “bad bank”.

He added: “As I reflect on the half, I am pleased with our performance, excited by the potential for the group, and confident in our plans to become the ‘go-to’ bank.”