Barclays has apologized for its role in the Libor scandal and now faces a new investigation by both US and UK regulators on the misselling of financial products. The investigation is focused on sufficient disclosure of fees paid when Barclays conducted emergency capital increases with Middle Eastern investors in 2008.
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The firm also said it missold derivatives products to small businesses and is now facing multiple lawsuits. It has put aside £450 million to settle the matter. Four current and former employees now face investigation. One of them is Barclay’s finance director, Chris Lucas.
Investors’ attention was on the firm’s profit report, which came in at £70 million for the first six months of 2012 down from £1.5 billion. Barclays reiterated its target of a 13% return on equity. Despite more bad news on the investigative front, investors rewarded the report of higher-than-expected income and lower-than-expected costs.
Barclays declined to estimate the possible financial result
of the lawsuits and is still looking for a new chairman and a new CEO. It has no intention of selling its investment banking arm and it defended its universal banking model. The investment banking division performed strongly during the first half.