LONDON â€" Barclays posted a loss for the third quarter on Wednesday, as the British bank's earnings were hit by provisions connected to the inappropriate selling of insurance to clients and charges on the firm's own debt.
The results mark the first time that Barclays' chief executive, Antony Jenkins, has reported earnings to shareholders since taking over from his predecessor, Robert E. Diamond Jr., who resigned in July following the Libor rate-rigging scandal.
Barclays agreed to a $450 million settlement with U.S. and British authorities after some of its traders altered the London interbank offered rate, or Libor, for financial gain.
The bank has started an internal review into the practices of its employees, some of whom may still face criminal charges. David Walker, a prominent British banker, will take over as chairman on Nov. 1, succeeding Marcus Agius, who also resigned because of the Libor scandal.
On Wednesday, the British firm said it was subject to two new regulatory probes. The Department of Justice and the Securities and Exchange Commission are investigating whether Barclays' relationships with third parties who help the bank to win or retain business are compliant with the United States Foreign Corrupt Practices Act. The U.S. Federal Energy Regulatory Commission also is investigating Barclays' past power trading activity.
The net loss of £106 million, or $170 million, in the three months through Sept. 30 compares to a £1.4 billion profit in the similar period last year. Barclays said it had taken a £1.1 billion charge connected to the value of its own debt, and also set aside a further £700 million in the third quarter to compensate clients who were sold insurance in appropriately. The firms already has earmarked £1.3 billion to reimburse customers.
Without the adjustments, Barclays said its pretax profit rose 29 percent, to £1.7 billion, in the three month s through Sept. 30.
“The last three months have been difficult for Barclays,†Mr. Jenkins said on a conference call with reporters on Wednesday.
Despite the continued volatility in global financial markets, the British bank said pretax profit in its investment and corporate banking division during the third quarter more than doubled, to just over £1 billion, because of strong performance in the firm's fixed income and equities divisions.
The European debt crisis, however, affected Barclays' retail and business banking franchise, which saw its pretax profit fall 31 percent, to £794.
The British bank, which has operations spread across the European Union, said it had moved to reduce its operations in debt-ridden countries like Spain and Greece. Barclays said it had cut its sovereign debt exposure to Spain, Italy, Portugal, Greece and Cyprus by 15 percent, to £4.8 billion, during the third quarter.
The bank's core Tier 1 ratio , a measure of ability to weather financial shocks, rose to 11.2 percent by the end of September, compared to 10.9 percent at the end of the second quarter.
Barclays warned that continued difficulties across Europe and uncertainty in global market could weigh on future profitability.
“We continue to be cautious about the environment in which we operate,†the bank said.
