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PPI provision hits profits at Barclays

PPI provision hits profits at Barclays

Category: Banking

Updated: 14/12/2012
First Published: 02/08/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Barclays has reported that profits fell in the first six months of the year, with provisions put aside for PPI payments partly to blame.

Pre-tax profits at the bank for the first half of 2011 totalled £2.6 billion, a fall of 33% from the same period last year.

Most of the bank's profits came from Barclays Capital, its investment banking arm

All of the UK banks face having to pay out millions, possibly billions, in payments to PPI customers after their challenge was rejected by the High Court.

However, Barclays reported that its lessened exposure to troubled eurozone countries such as Portugal and Spain saw its bad debts fall by 41% to £1.8 billion this year.

Barclays said that it was fulfilling its obligations to lend to businesses, having extended £20 billion of new lending in the first half of the year.

Some £7 billion of this has been loaned to small and medium sized businesses.

In its results, Barclays revealed that it would look to cut another 1,400 jobs in 2011, having made the same number in the year so far.

It is the second bank to state its intentions to cut more jobs this week.

HSBC said yesterday that it is to make 25,000 more job cuts worldwide in the next two years, although none of these are expected to be made in the UK .

It adds to the 5,000 cuts it has already announced, 700 of which will be made to its UK operations.

The banking giant said that it has recorded pre-tax profits of $11.5 billion (£7 billion) in the first six months of the year, up from $11.1 billion that was reported during the same period in 2010.

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