Barclays hit by £1.4 billion over last minute rush of PPI claims
UK banking group Barclays has reported a £1.4bn hit over Payment Protection Insurance to its balance sheet in its third quarter results statement.
Barclays reported a UK profit before tax of £400m, adding that, when the provisions for PPI claims were excluded, the figure was £1.9bn
The London headquartered bank is the second this week to report a significant amount of its profits being eaten up by the ongoing PPI fiasco. On Thursday, Royal bank of Scotland reported a £900m hit to its profits over PPI.
Despite the PPI impact, Barclays CEO Jes Staley said the business had delivered a “robust year-to-date RoTE of 17.2%, including 21.2% in the third quarter, through mortgage and deposit balance growth.”
He added that the bank would continue to invest in new technology, while remaining vigilant over costs.
“As we continue to invest in our digital capabilities across the bank, management's focus on cost control remains a priority”, he said.
“Our cost to income ratio was stable at 62%, and we continue to expect to see positive jaws across the Group over the remainder of the year, and for the full year.
However Staley also warned of clouds on the horizon over the next year, saying “we acknowledge that the outlook for next year is unquestionably more challenging now than it appeared a year ago, in particular given the uncertainty around the UK economy and the interest rate environment.
The FTSE 100-listed bank's shares were trading 1.2% higher at £1.68 in early trading in London.