LONDON - Barclays on Friday reported a 76 percent drop in its net profit during the first six months of the year after the British bank took an accounting charge on its own debt and other one-off costs.
The results come a month after Barclays announced a $450 million settlement with American and British authorities in connection to the manipulation of the London interbank offered rate, or Libor.
A number of the bank's top executives, including its former chief executive, Robert E. Diamond Jr., resigned in the wake of the scandal, which involved some of the firm's traders and senior executives altering Libor submissions for financial gain.
“We are sorry for the issues that have emerged over recent weeks and recognize that we have disappointed our customers and shareholders,†Barclays' chairman, Marcus Agius, who also is to step down, said in a statement.
Barclays disclosed on Friday that it was facing a number of class action lawsuits in the Unit ed States related to the manipulation of both Libor and the Euro interbank offered rate, or Euribor. The most recent lawsuit was filed at the beginning of July.
The bank has appointed Anthony Salz, vice-chairman of the advisory firm Rothschild, to conduct a review into the British bank's business practices. A number of current and former Barclays employees may still face criminal charges related to the rate-rigging scandal.
Barclays also said that the Financial Services Authority, the U.K. regulator, is investigating a number of current and former employees, including Barclays' finance director, Chris Lucas, for activities connected to Barclays' fundraising efforts in 2008.
In the aftermath of the collapse of Lehman Brothers in 2008, the British bank tapped Middle Eastern investors for new capital, though existing shareholders voiced criticism that their rights were overlooked as Barclays turned to outside investors for the fresh injection of capital.
< p>The bank's net income for the first six months of the year dropped 76 percent, to £480 million, or $752 million, compared to £1.98 billion in the similar period in 2011.Barclays took a one-time charge against its own debt and other costs, such as the inappropriate selling of insurance to customers and the mis-selling of rate hedging products to small businesses.
Without the accounting charge and other one-time costs, Barclays' net profit in the first half of the year rose 9 percent, to £3.07 billion, compared to £2.8 billion a year earlier.
The rise, which beat analysts' estimates, was driven by an improved performance in the bank's retail and corporate banking divisions. Barclays' investment banking unit, however, continued to be weighed down by the ongoing volatility in financial markets caused by the European debt crisis.
Barclays' shares rose 5 percent in early morning trading in London.
The British bank said it ha d reduced its exposure to the debt of southern European countries by 22 percent, to £5.6 billion, during the first six months of the year.
The bank's core Tier 1 ratio, a measure of ability to weather financial shocks, fell slightly to 10.9 percent, while Barclays' return on equity, including the one-time costs, fell to 0.3 percent.
“We continue to be cautious about the environment in which we operate and will maintain the group's strong capital, leverage and liquidity positions,†Mr. Lucas of Barclays said in a statement.
