Past misconduct tore a £2 billion hole in half-year results, Barclays announced today.
The banking group suffered a 29% drop in pre-tax profit in the six months to June 30 compared with the same period last year, down to £1.659 billion.
Barclays' results were impacted by two charges relating to so-called conduct issues.
Payment insurance mis-selling
The largest was a settlement with the US Department of Justice of £1.4 billion in relation to the bank’s role in selling mortgage -backed securities (MBS), the “toxic” assets comprised of bundles of sub-prime home-loans advanced to people who, in many cases, could not afford them.
MBS were blamed for triggering the credit crunch in August 2007 that lead to the financial crisis the following year.
The remainder of the £2 billion cost was comprised of litigation costs.
Shares declined 1.99p, or 1.04%, in morning trading in London, to 189.71p after the release of the Barclays interim results.
Excluding litigation and misconduct charges, said Barclays, pre-tax profit rose 20% to £3.701 billion, despite the adverse effect of a 10% average depreciation of the
“True potential and value”
In the UK, pre-tax profit rose from £634 million in the first half of 2017 to £826 million. Barclays International saw pre-tax profit rise from £2.617 billion to £2.710 billion.