Barclays puts buyback on hold amid fallout from trading error
2022.04.28 09:31
FILE PHOTO: A branch of Barclays Bank is seen, in London, Britain, February 23, 2022. REUTERS/Peter Nicholls
By Lawrence White and Iain Withers
LONDON (Reuters) -Barclays put share buyback plans on hold pending discussions with U.S. regulators over a possible restatement of its 2021 earnings following a trading blunder, overshadowing a better than expected first quarter profit performance.
The British bank disclosed last month it had exceeded a U.S. limit on sales of structured products, triggering fresh provisions and regulatory scrutiny.
“ Barclays (LON:BARC) remains committed to the share buyback programme and the intention would be to launch it as soon as practicable following resolution of filing requirements being reached with the SEC,” the bank said on Thursday.
The lender had previously said the 1 billion pound buyback would commence in the second quarter, after the mistake which involved U.S. structured products was disclosed.
Dealing with the fallout from the trading error poses an early problem for Chief Executive C.S. Venkatakrishnan, who took over following the shock exit of Jes Staley in November.
Staley left in the wake of a dispute with British financial regulators over how he described his ties with convicted sex offender Jeffrey Epstein.
Barclays disclosed it had been hit by more than 500 million pounds in litigation and conduct costs in the quarter, including a 320 million pound provision in its investment bank for the over-issuance mistake.
Barclays on Wednesday posted a profit before tax for the three months ended March of 2.2 billion pounds ($2.75 billion), above an average analyst forecast of 1.3 billion pounds and below the 2.4 billion pounds booked in the same period last year.
Its CET 1 ratio, a key indicator of financial strength, fell by 130 bps to 13.8%, largely due to a 14.7 billion pound rise in risk-weighed assets to 328.8 billion.
($1 = 0.7990 pounds)
