Barclays hit by $590 million loss on product gross sales blunder By Reuters

By Iain Withers

LONDON (Reuters) – British financial institution Barclays (LON:) disclosed on Monday an estimated 450 million pound ($592 million) loss on mishandled structured product gross sales and mentioned this meant it might now delay a share buyback.

The lender mentioned it supplied and bought practically twice as many affected securities over a interval of a couple of yr because it was registered to promote in america, overshooting its $20.8 billion restrict by $15.2 billion.

The securities would now must be purchased again at their unique buy value, the financial institution mentioned.

The merchandise had been two exchange-traded notes linked to and market volatility, a supply aware of the matter instructed Reuters. The financial institution suspended gross sales and issuance of the notes this month.

The financial institution mentioned its “finest estimate at the moment” was that the loss would quantity to 450 million kilos, reducing its core capital ratio right down to the center of its 13-14% goal vary. The loss estimate didn’t embody tax.

Barclays mentioned it might delay a deliberate 1 billion pound share buyback till the second quarter, including that it had commissioned an unbiased overview of the matter.

Regulators had been additionally conducting inquiries and requesting data, the financial institution mentioned.

Shares within the financial institution had been down 3% in early buying and selling.

Barclays’ wider funding financial institution had beforehand proved a stellar performer for the group over current years, serving to it put up a report annual revenue for 2021.

Analysts at Shore Capital mentioned in a notice that the financial institution gave the impression to be “tripping over its shoelaces”.

Whereas the present share buyback has solely been delayed, the error might cut back future capital distributions to shareholders by the financial institution, the analysts mentioned.

($1 = 0.7604 kilos)

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