British bank Barclays returned to profit in 2016 after slashing provisions set aside for legal and compensation costs linked to foreign exchange and insurance scandals, it said Thursday. Chief executive Jes Staley saluted the performance of core operations in the UK and abroad and said the bank would complete a restructuring programme faster than expected.
Barclays said it plans to shut down its non-core division six months earlier than planned, on June 30. Amid talk of banks switching operations out of the UK owing to Brexit, Staley told reporters on a call that London was set to remain Europe's financial centre. Barclays reported annual net profit of £1.62 billion ($2.0 billion, 1.92 billion euros) compared with a loss after tax of £394 million in 2015, it said in an earnings statement.
The bank set aside no amount at all in 2016 for "ongoing investigations and litigation including foreign exchange", whereas it had taken a hit of more than £1.0 billion relating to the matters in 2015. Barclays did provide £1.0 billion last year to compensate customers who were mis-sold a UK insurance product, although this was substantially lower compared with 2015. Regarding day-to-day operations, Staley said that the bank's core businesses were performing well, with pre-tax profits up four percent to £6.4 billion. US national Staley joined the bank in December 2015, and was tasked with restoring Barclays' battered reputation following a series of high-profile scandals, including the rigging of foreign exchange and Libor interest rate markets.
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