As litigation expenses are a constant issue for firms in the legal spotlight, banking firms have experienced some of the greatest stress caused by legal expenses since the financial crisis towards the end of the last decade. U.K. firm Barclays has been no exception, and the banking firm’s report issued on February 11 details the huge increase in litigation provisions that the company allotted for 2013.
The provisions went from £200 million to £485 million in one year alone, a 142 percent increase.
Legalweek reported on the banking firm’s other distribution of funds and fees, particularly about how it has dealt with legal issues recently: “Barclays spent £1.25bn on consultancy, legal and professional fees in 2013, a 6 percent increase on the £1.18bn spent the previous year, despite the non-recurrence of the £290m penalty incurred in the Libor settlement with US and UK authorities in 2012. Barclays also acknowledged it is being investigated by the Serious Fraud Office over allegedly concealing £322m in payments to Qatari investors after they injected a total £12bn into the bank in 2008, at the height of the financial crisis.”
This information comes on the heels of the company’s announcement that it is also going to cut nearly 12,000 jobs in the next year on top of increasing bankers’ bonuses. At a time when banking firms are increasingly aware of public opinion surrounding big bonuses for executives, and investors have become more vocal of their disapproval of companies that operate in such a way, Barclays has received flack for its announcements in this regard. Although the company’s chief executive Antony Jenkins has refused big bonuses in the past, the revealing of massive job cuts — especially in light of such an increase in litigation provisions — is not boding well for the company’s brand.
Additionally, the company just lost two heads of staff: Its general counsel, Mark Harding, and its financial head, Chris Lucas, are retiring. Jenkins told reporters: “Despite challenging conditions, our underlying performance has been resilient and momentum is building, as evidenced by the results,” and iterated that the bank is “ensuring that Barclays has the right people in the right roles.”