LONDON - Barclays said on Tuesday that it had set aside a further £1 billion ($1.6 billion) to cover legal costs related to its inappropriate selling of complex financial products to customers.
The announcement follows the decision by Antony P. Jenkins, the new chief executive of the British bank, to forgo his bonus in response to the series of scandals that have hit Barclays in recent years.
The bank was the first firm to reach a settlement with American and British authorities last year related to the manipulation of the London interbank offered rate, or Libor. The benchmark rate underpins trillions of dollars worth of financial products worldwide, including complex derivatives and mortgages.
In its latest move to handle past indiscretions, Barclays said it had set aside an additional £600 million for the inappropriate selling of insurance to consumers. In total, the bank has now made provisions of £2.6 billion to compensate affected customers, of which it had returned £1.6 billionby the end of last year, according to a statement from Barclays.
Other larger British banks, including HSBC, Royal Bank of Scotland and Lloyds Banking Group, have all been forced to repay customers for inappropriately selling them insurance. Many customers were unaware that they had been sold the financial products when they took out mortgages and loans, while others have struggled to make claims on the policies.
Barclays also said on Tuesday that it had set aside a further £400 million for legal costs related to the sale of certain interest-rate hedging products to small businesses in Britain. Barclays now has made provisions totaling £850 million to compensate customers for these products, of which only £36 million had been paid out by the end of 2012.
Barclays is not the only British bank to face new legal problems because of the hedging products.
Last week, the Financial Services Authority, the country’s financial regulator, demanded that local financial institutions ! review all sales of such products after authorities found that more than 90 percent of a sample group of the instruments were sold improperly.
Barclays has been trying to rebuild its reputation since several of its senior executives, including its former chief, Robert E. Diamond Jr., resigned in the wake of the Libor scandal last year.
The bank will announce a major restructuring of its business units when it reports earnings on Feb. 12, which could include the loss of around 2,000 jobs in the firm’s investment banking division.
On Sunday, Barclays’ chief financial officer, Christopher G. Lucas, and its general counsel, Mark Harding, also said they would resign. Mr. Lucas is one of four current and former executives who are under investigation in connection to how Barclays tapped Qatar investors for new capital during the financial crisis.
The British bank said on Tuesday that it had appointed Diane de Saint Victor, currently general counsel of the Swiss engineering company ABB, s a new non-executive director.
