UK: Barclays reveals 7% profits slide

Barclays took a fresh £900 million hit to cover payment protection insurance (PPI) claims as it revealed a 7% slide in first-half profits today.

The bank said adjusted pre-tax profits for the period were £3.35 billion as earnings from its troubled investment arm - which is undergoing thousands of job cuts - slumped by 46% to £1.06 billion.

It revealed that the impact of the PPI mis-selling scandal, which has dogged major lenders and seen them set aside billions to cover compensation schemes, refused to go away.

Barclays took the size of its PPI provision pot to nearly £5 billion after adding £900 million “as a result of the lower expected decline in claims”. The sum topped up the existing £3.95 billion fund.

The bank said it had seen an increase in cases from claims management companies in the second quarter of this year and that these were only 39% lower than at the peak in May 2012 - with direct customer claims down 69%.

Meanwhile, Barclays said overall profits were also hit by currency movements.

But it said there were improvements for personal and corporate banking as well as its non-core division housing billions of assets it wants to sell or run down.

Chief executive Antony Jenkins said the group was making “encouraging progress” on its plan to “simplify, focus and rebalance the group”.

Shares rose 3% following the half-year results today.