Barclays reported that net profit dropped 76% to $752 million during the first six months of the year. During this time period, the bank has taken an accounting charge on its debt and a charge for selling complex financial products to small businesses inappropriately. Barclays’ chairman Marcus Agius said in a statement, “We are sorry for the issues that have emerged over recent weeks and recognize that we have disappointed our customers and shareholders.”
The bank’s regulatory and legal issues have been a continued source of financial pain. Barclays recently disclosed that the company was facing lawsuits related to a rate-rigging scandal. Barclays announced a $450 million settlement with British and American authorities over the manipulation of benchmark rates, including the London interbank offered rate, or Libor, in June.
According to a statement from the bank, Barclays is facing class action lawsuits in the United States related the manipulation of benchmark rates, with one of the lawsuits also citing unnamed current and former members of the bank’s board as defendants. Barclays said it was “not practical” to estimate the costs related to the legal proceedings.
Regulators are also investigating the company’s financial director regarding a different matter. British regulator Financial Services Authority is looking into the actions of some current and former Barclays employees, including finance director Chris Lucas, over fee disclosures related to the bank’s capital-raising efforts in 2008. The bank said in a statement, “Barclays considers that it satisfied its disclosure obligations and confirms that it will cooperate fully with the F.S.A.’s investigation.”
According to regulatory filings, the issues revolve around agreements with the Sumitomo Mitsui Banking Corporation of Japan and the Qatar Investment Authority. In 2008, the British bank obtained £11.8 billion, or $18.6 billion, from Middle Eastern investors in two rounds of capital raising. Existing shareholders voiced concerns that their rights were overlooked when Barclays turned to outside investors for capital.