It was provisions for fines and redress on past foreign exchange and payment protection insurance business that dominated the headlines about Barclays' (BARC) first quarter results. The bank said it had set aside a further £800m in the quarter for the cost of forex investigations and litigation, and an extra £150m for PPI compensation.
But looking beyond this hit, there are some encouraging signs that the turnaround potential, which prompted us to make Barclays our recovery tip of the year, is coming through. Adjusted pre-tax profit increased by 9 per cent to £1.8bn following improvements in investment, corporate and personal banking, and stronger performance in its African business. This was also boosted by a lower level of impairment helped by the UK's improving credit environment. Adjusted group return on shareholders’ equity was up slightly at 7.6 per cent compared to 6.5 per cent in the first quarter of 2014.
