Conduct charges push Barclays to £236m loss

Barclays (LSE: BARC.L - news) dived into the red in the first quarter of the year, as a series of costs pushed the bank to a pre-tax loss of £236m.

The bank, which reported profits of almost £1.7bn for the same period a year ago, said a £1.4bn settlement with the US government last month and further provisions for the PPI scandal hit its bottom line.

It set aside a further £400m to cover the costs of payment protection insurance mis-selling - dragging profits at its UK business down 17% to £581m.

The lender said earnings at its ring-fenced bank for UK retail customers were also curtailed by a 13% increase in credit impairment charges while investment caused a spike in operating costs.

Chief (Taiwan OTC: 3345.TWO - news) executive Jes Staley - who was told last week he faces fines by regulators over alleged attempts to unmask a whistleblower - said the US settlement was the main reason for the profit hit.

"While the penalty was substantial, this settlement represents a major milestone for Barclays, putting behind us a
significant, decade-old legacy matter, " he said.

It related to claims the bank mis-sold mortgage-backed securities in the run-up to the financial crisis.

RBS (LSE: RBS.L - news) is awaiting completion of a similar settlement on the same issue.

Barclays said its deal allowed it to focus on moving the business forward in the best interests of shareholders.

"Together with the extensive restructuring completed last year, Barclays is now well-positioned to deliver strong earnings going forward and remains confident of achieving its returns and cost targets," the statement said.

Its shares were 0.4% lower in mid-morning trading on the FTSE 100.