Barclays sets aside another £600m for PPI compensation claims

General view of a branch of Barclays bank in Leicester. Picture: Joe Giddens/PA Wire

General view of a branch of Barclays bank in Leicester. Picture: Joe Giddens/PA Wire

Barclays says it has set aside an extra £600m to meet compensation claims for mis-selling of payment protection insurance (PPI) in the third quarter.

The sum exceeds some banking expert estimates for £500m in the three months to September and brings the total provision over the past two quarters alone to £1bn, after £400m was put aside in the second quarter.

The banking industry’s PPI bill already stands at more than £30bn.

The Financial Conduct Authority (FCA) has put a June 2019 deadline on claims in an effort to draw a line under what has been one of the biggest banking scandals in history.

Barclays’ statutory profit before tax was up 35% to £837m in the third quarter.

Net operating income fell to £4.7bn in the quarter, from £5bn in the same period last year.

Chief executive Jes Staley said the bank’s is still focused on selling down and disposing of its hinterland businesses as quickly as possible to focus in on US and UK operations

Mr Staley added: “The growing momentum in attaining our strategic goals means we can feel optimistic of our prospects of completing the restructuring.

“Our core businesses are performing well, non-core rundown is approaching the final lap toward closure, we are on top of costs, and our capital position is resilient with strong reasons for confidence in meeting our end state target.”

Barclays earlier this month announced plans to sell its Egyptian business to Attijariwafa Bank for a price understood to be about $500m US dollars (then £392m).

The overhaul has also seen the lender sell its Barclaycard credit card operations in Spain and Portugal to Bancopopular-e and sell down its 62.3% stake in Barclays Africa.

In August, the bank also sold its risk analytics and index unit to Bloomberg for about £615m.

“Taken together, the picture in the third quarter is one of strong progress against this agenda,” the chief executive said.

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