Earnings

Barclays profits hit by investment bank problems

What is the problem with Barclays' dark pool?
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What is the problem with Barclays' dark pool?

Barclays investment banking profits almost halved in the first half compared to the same period last year, as trading revenues slumped.

The bank reported a 10-percent fall in pre-tax profit to £3.8 billion ($6.5 billion) for the six months to the end of June, as a 46 percent reduction in pre-tax profit at the investment bank to £1.06 billion offset a better performance elsewhere.

Chris Ratcliffe | Bloomberg | Getty Images

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Barclays also set aside a further £900 million to pay off clients mis-sold payment protection insurance (PPI).

The bank is currently vigorously contesting allegations from the New York Attorney General that its "dark pool" LX gave an unfair advantage to its high-frequency traders over other investors. Dark pools are private stock-trading platforms, where trades are conducted anonymously, and have come under attack for allowing high-frequency traders to trade ahead of other investors, including their bank's clients.

Barclays said it is "not currently practicable" to put a figure on how much these actions might eventually cost. It also declined to estimate the eventual bill for the impact of civil actions from shareholders over the Libor and foreign exchange trading scandals.

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Led by Chief Executive Antony Jenkins, who made his name in retail banking, the bank is cutting the amount of jobs and the portion of its balance sheet exposed to investment banking.

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Its fixed-income, currency and commodities trading division suffered another quarter of falling revenues.