30/10/2013 08:15 GMT | Updated 30/10/2013 08:20 GMT

Barclays Drawn Into Foreign Exchange Manipulation Probe

Customers wait outside a retail branch of Barclays Bank for the bank to open in London, Tuesday, Feb. 12, 2013. Barclays PLC has announced plans to cut at least 3,700 jobs in a major restructuring that follows a scandal-hit year for the U.K. bank. The bank said Tuesday it will cut at least 1,800 positions in the Corporate and Investment Bank unit and 1,900 retail and business banking jobs outside the U.K. The cuts come after the British institution was forced to pay a $453 million fine for manip

Barclays revealed it had been pulled into a worldwide investigation into alleged manipulation of the £3 trillion-a-day foreign exchange market as it reported profits from its investment banking arm fell by half in the third quarter.

The group said it was cooperating and was reviewing its foreign exchange trading over a period of several years to August this year. This comes after the Royal Bank of Scotland confirmed earlier this month that it was also under investigation.

The latest investigation into rate-fixing comes after Barclays paid £290 million in fines to US and UK regulators in June last year over the manipulation of Libor and Euribor interbank rates, in a scandal that claimed the scalp of chief executive Bob Diamond

The Financial Conduct Authority's inquiry, joining investigations by Hong Kong and Swiss regulators, could take months to conclude and has the potential to be as big as the Libor fixing investigation.


Barclays posted total pre-tax profits for the period had fallen by 26% to £1.38 billion compared to the same period last year - though statutory profits, when some accounting provisions are included, were up sharply. The group said pre-tax profits from its investment bank dropped by 53% to £463 million.

Lower activity was driven by uncertainty about when the US Federal Reserve would start slowing its quantitative easing programme that is pumping billions of dollars into the economy every month. Profits from UK retail and business banking were 2% down at £351 million.

Meanwhile, the bank said that provision for mis-selling payment protection insurance remained unchanged. It has £1.26 billion left of a £3.95 billion pot set aside to cover compensation schemes..

In its latest trading update, the bank said: "Various regulatory and enforcement authorities have indicated they are investigating foreign exchange trading, including possible attempts to manipulate certain benchmark currency rates or engage in other activities that would benefit their trading positions.

"The investigations appear to involve multiple market participants in various countries. Barclays Bank has received enquiries from certain of these authorities related to their particular investigations, is reviewing its foreign exchange trading covering a several year period through August 2013 and is cooperating with the relevant authorities in their investigations.

"It is not possible at this stage for Barclays to predict the impact of these investigations on it."

Elsewhere in the report, Barclays chief Anthony Jenkins said the group was "well-positioned to take advantage of improvements in the global macro environment".

He said performance was resilient, but added: "I am not complacent, and my executive team know we must push harder in the final quarter into 2014."