Barclays 'sorry' for Libor, but not for bumper results!
By Michael Northcott Friday, 27 July 2012
The bank may have trotted out an apology this morning over the rate fixing scandal, but it sure ain't sorry about it's results...
A bittersweet (but mostly sweet) morning for the folks at Barclays today, after the bank announced half-year profits of £4.23bn, a 13% increase on the previous year and combined the results announcement with an apology credited to chairman Marcus Agius. Agius said in the statement: ‘We are sorry for the issues that have emerged over recent weeks and recognise that we have disappointed our customers and shareholders.’ And enraged the general public and half the political establishment too, pal.
Despite having ‘disappointed’ its customers, one of the areas in which the bank did particularly well was its retail and business banking division, which saw profits rise by 15%. Corporate and investment banking saw a rise of 11% (no surprise when you can just manipulate interest rates to improve your trading position), and a whopping 38% in wealth and investment management. The bank says this ‘demonstrates the benefits of the universal banking model’.
Unfortunately, the picture isn’t very rosy if you take your eyes of the figures for a moment. The Financial Services Authority (FSA) is now investigating Barclays finance director, Chris Lewis, and three other current and former senior executives over fees relating to fundraisings in 2008 – when the financial crisis was kicking off. This is in addition to the Serious Fraud Office (SFO) investigating the Libor scandal. All in all, this rate fixing malarkey has result in a PR disaster for the firm: corporations really could do without being in the spotlight and under investigation.
Still, with profit rises exceeding forecasts (even when the £290m fine to various US and UK authorities is counted), shareholders probably won’t be that bothered for the time being. What the long-term effects of the scandal are on Barclays’ reputation remains to be seen…