Barclays sees net profits slump, apologizes for Libor affair

LONDON, United Kingdom – Troubled British Bank Barclays said Friday, July 27, that interim net profits shrank to £70 million on vast exceptional charges, and apologized again for the Libor rate-rigging scandal that has rocked the group.

Earnings after taxation shrank to the equivalent of 89 million euros or $110 million in the six months to June, compared with £1.5 billion in the same period of the previous year, Barclays revealed in a results statement.

“We are sorry for the issues that have emerged over recent weeks and recognise that we have disappointed our customers and shareholders,” said outgoing chairman Marcus Agius, in reference to the Libor scandal which sparked his own resignation.

“I speak for all of Barclays’ people when I say how determined we are to regain the full confidence of all our stakeholders; customers and clients, investors, regulators and staff alike.”

The London-listed bank was last month fined £290 million by British and US regulators after admitting that it attempted to manipulate the Libor and Euribor rates between 2005 and 2009.

Friday’s first-half results also included a vast accounting charge of £2.945 billion on the value of the group’s outstanding debt.

Stripping out exceptional costs, the lender added however that underlying pre-tax profits climbed 13% to £4.23 billion on the back of a strong investment banking division.

The Libor scandal prompted the resignation of chairman Agius and chief executive Bob Diamond earlier this month, and also sparked a fierce political debate over ethics in the banking sector.

“The recent events have been challenging for Barclays and all those who work for the group,” added Agius in the earnings release.

“We continue to address the operational and control issues raised in connection with our Libor settlement with the US and UK authorities, many of which have been resolved over the course of the investigation.

“However, as a consequence of recent events, the board of directors is now focused on identifying and recruiting a new chief executive as well as a chairman of the board.

“During this interim period, my role as chairman of the executive committee is to provide stability and continuity for our customers and stakeholders.”

Britain’s Serious Fraud Office announced earlier this month that it was considering whether it was appropriate and possible to bring criminal prosecutions over the Libor scandal.

Prime Minister David Cameron also launched a parliamentary inquiry into the revelations that Barclays traders had lied about the interest rates other banks were charging it for loans.

Libor, or London Interbank Offered Rate, is a flagship London instrument used as an interest benchmark throughout the world, while Euribor is the eurozone equivalent. The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money. – Agence France-Presse

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