Barclays suffers $590 million in damages due to faulty product sales According to Reuters

By Iain Withers

LONDON (Reuters) – Bank of England Barclays (LON:) disclosed an estimated £450 million ($592 million) loss from structured product mishandling and said this means it will now delay the share buyback.

The lender said it offered and sold nearly twice the amount of affected securities over a period of about a year compared to when it was registered for sale in the United States, exceeding the $20.8 billion limit to $15. $2.2 billion.

The bank said the securities would now have to be redeemed at their original purchase price.

A source familiar with the matter told Reuters that the products were two bills that were exchanged in relation to market volatility. The bank suspended the sale and issuance of banknotes this month.

The bank said its “best estimate at this time” is a loss of £450 million, cutting its core capital ratio to the middle of its 13-14% target range. Estimated loss does not include taxes.

Barclays said it would delay its planned £1 billion share buyback until the second quarter, adding that it had authorized an independent review of the matter.

Regulators are also conducting investigations and requesting information, the bank said.

The bank’s shares fell 3% in early trading.

Barclays’ broader investment bank has previously demonstrated a stellar performance for the group in recent years, helping the bank post record annual returns for 2021.

Analysts at Shore Capital said in a note that the bank appeared to be “stumbling on a shoelace”.

While share buybacks are currently only delayed, the error could reduce future capital distribution to the bank’s shareholders, the analysts said.

(1 dollar = 0.7604 pounds)