Barclays has set aside another 850 million pounds ($1.3 billion) to compensate UK customers, as its new chairman seeks to stamp his mark on the bank with plans to accelerate the sale of assets and cost cutting. David Pollard reports.
Barclays is in turnaround mode and wants to speed that process up. And is announcing another set-aside as it tries to shake off past problems. If its results are an indicator of progress, they're better than expected. Q2 pretax profit is up 12 per cent from a year ago and ahead of forecasts. (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: ''John McFarlane has said that he wants to double Barclays' share price over the next three or four years. Earnings have to be a big part of that. He's cited simplifying and streamlining the bureaucracy within Barclays and increased customer focus.'' New chairman John McFarlane arrived at Barclays in April with a reputation for bold moves. One of which was to fire chief exec Antony Jenkins earlier this month. The bank is still looking for a new boss. And there's speculation some others across the bank could go as well as it seeks to step up cost cutting. Barclays is already shedding 19,000 staff. McFarlane aims to cut non-core assets to 20 billion assets by the end of 2017. And plans to bring costs as percentage of income to the 'mid 50s' per cent from 68 per cent previously. Asset sales too will be sped up - though there seems to be little further guidance on the future of its controversial but still profitable investment division. (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: ''It's the sustainability of the investment bank returns which is very much the issue. Just because they've have had a good quarter in Q2 doesn't mean they can replicate that in the current quarter, for instance.'' The new set-aside amounts to 850 million pounds - mostly for missold payment protection insurance products which have already cost Barclays six billion pounds.