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New probe for Barclays

Friday, July 27, 2012 - 02:17

July 27 - After posting better than expected first-half results and saying sorry for its role in an interest-rate rigging scandal, the British bank Barclays revealed a new regulatory probe and more U.S. lawsuits. Joanne Nicholson reports

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The British bank Barclays beat expectation with its half year results. Profits were up 13 percent from a year ago, at 4.2 billion pounds. That's over 6 billion dollars. The good results came in the wake of a recent scandal that saw Barclays fined a record £290 million pounds for rigging the inter-bank lending rate. And the bank's chairman, Marcus Agius took the opportunity to apologise. GFX "We are sorry for the issues that have emerged over recent weeks and recognise that we have disappointed our customers and shareholders.", he said. "I am confident we can, and will, repair the reputational damage done to our business in their eyes and those of all our stakeholders" But many feel the results aren't enough to repair the damage to the bank's reputation. Michael Hewson is from CMC Markets: (SOUNDBITE) (English), MICHAEL HEWSON, SENIOR MARKET ANALYST, CMC MARKETS, SAYING: "There are a number of areas of concern. their exposure to peripheral sovereign debt. Now they've cut that back to about 5.6 billion euros. But there is another notable concern; and that's the number of corporate loans to Spanish and Italian companies. That totals about 50 or 60 billion pounds. So if those economies deteriorate they could face some further losses. They've taken another write-down on the mis-selling of interest rate collars." With the departure of the bank's chief executive, Bob Diamond, earlier this month, closely followed by his chief operating officer, Jerry del Messier, Barclays now needs to address the power vacuum at the top of the organisation. Agius is also due to leave once he's taken care of the new appointments. The bank now has a new problem to deal with relating back to 2008 when it needed to raise capital to avoid being part-nationalised. Barclays says Britain's financial regulator has started an investigation involving the bank and four current and former senior employees, including finance director Chris Lucas. The Financial Services Authority is investigating whether the bank made sufficient disclosures about the fees it paid under commercial agreements Barclays also faces more U.S. lawsuits over the LIBOR scandal. More than a dozen other banks are expected to be drawn into the investigation Joanne Nicholson, Reuters

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New probe for Barclays

Friday, July 27, 2012 - 02:17