Barclays set aside a further £700m for PPI compensation claims
Shares dip after posting a fall in year-on-year profits
by Abi Moses on 28th July, 2017
Banking giants, Barclays have been dealt a blow after it emerged that the lender has set aside a further £700m to pay compensation to customers -sold payment protection insurance (PPI).
The allocation was confirmed after it had emerged the group had posted a £1.2bn loss for the first six months of 2017.
In an effort to focus on British and American operations, Barclays sold off part of its business in Africa. If all Africa-related issues are taken out of consideration, their half-year pre-tax profits were up £2.341bn on last year.
Jes Staley, Barclays' chief executive, said "Our business is now radically simplified, the restructuring is complete, our capital ratio is within our end-state target range and, while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders - improving group returns."
Barclays were not the only bank under compensation-driven pressure after Lloyds Banking Group confirmed they are to refund fees charged to customers who, between 2009 and 2015, fell behind on mortgage payments.
An estimated 590,000 customers are due a refund, with an average value of £480 - a total repayment of £283m.
Jonathan Davidson, an FCA banking regulator, said "Ensuring fair treatment of customers, especially those in financial difficulties or who are vulnerable, is a key priority for the FCA. We continue to engage with Lloyds as it works to improve the way it treats customers in arrears."
Shares in both Barclays and Lloyds were down in Friday's trading.
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