Barclays’ full-year results hit by litigation costs amid SFO Qatar probe

A Barclays bank branch in central London. British banking giant Barclays said on Thursday that losses related to the sale of its African business, litigation costs and a one-off negative impact from the US tax reforms pushed it into the red in 2017. (AFP)

LONDON: Barclays’ 2017 results have revealed the impact of litigation costs on the company’s full-year profits as the lender faces charges from the UK’s Serious Fraud Office (SFO) over a loan to Qatar a decade ago.
The group spent £1.2 billion ($1.7 billion) on litigation and regulatory costs last year. The bank reported a pre-tax group profit of £3.5 billion, but an overall £1.9 billion loss for 2017. Despite the loss, the group’s shares rose 4.6 percent in early trade as it restored its full dividend.
Barclays posted a £1.6 billion profit in 2016.
Litigation costs included charges of £700 million related to Payment Protection Insurance. The group also reported a £2.5 billion loss related to the sell-down of the Barclays Africa Group, which contributed to the dragging down of the group’s profits, along with other costs and taxes.
The group’s annual results closely follow the SFO decision announced on Feb. 12 to charge Barclays Bank with “unlawful financial assistance,” relating to the $3 billion loan it gave to Qatar Holding between Oct. 1 and Nov.30 2008, for the alleged purpose of directly or indirectly acquiring shares in Barclays PLC.
The capital-raising exercise took place at the height of the financial crisis just as other UK banks were accepting government bailout funds to save them from collapse.
Barclays is also battling with the US Justice Department relating to allegations about mortgage-backed securities.
Against this backdrop of legal disputes, Barclays chief executive, James Staley, has said he remained confident about the future of the business.
“While we still have a number of legacy conduct issues to address, I am confident in the capacity of this business to generate excess capital going forward, and it remains our intention over time to return a greater proportion of that excess capital to shareholders through dividends, and other means of capital distribution, including share buybacks,” he said in a statement accompanying the group’s full-year results.