A provision of £1.25 billion was put aside for "ongoing investigations" and potential litigation relating to its foreign exchange operations, Barclays said. This included an additional £750 million put aside in the last quarter of 2014 which weighed on its earnings for that period.
Many other lenders have settled or resolved similar issues, but an ongoing probe by a New York banking regulator means that Barclays has yet to fully realize any potential fines.
"We remain focused on addressing outstanding conduct issues," CEO Antony Jenkins said in the report on Tuesday. "I regard the behavior at the center of these investigations as wholly incompatible with our values, and I share the frustration of colleagues and shareholders that matters like these continue to cast a shadow over our business."
Shares were down by over 2 percent as markets opened in Europe on Tuesday morning. Analysts at BNP Paribas called the results a "bit messy" with the one-off payments included in the report.
"Litigation costs continue to weigh on profitability while adjusted profit is improving," analysts Gildas Surry and Geoffroy de Pellegars, said in a morning note.
The bank's bonus pool was reduced by 47 percent, the bank said in its earnings - an average reduction of 17 percent per employee. After turning down his bonus last year, Jenkins was awarded £1.1 million for this 2014. Its dividend for shareholders was kept at 6.5 pence per share for 2014.
Meanwhile, other British banking giants' earnings painted a less-than-rosy picture of the industry this month.
HSBC's profits fell to a worse-than-expected $18.7 billion in 2014, hit by difficult Asian trading and geopolitical tensions.
While Royal Bank of Scotland reported an annual loss of £3.47 billion ($5.39 billion) in 2014, after booking a £4 billion writedown in the value of its U.S. offshoot Citizens.
—CNBC's Catherine Boyle contributed to this article.