Banks Profits are falling: Barclays Falls by Third

July 3, 2012 - PRLog -- Banks are widely facing financial deficit due to over burden of compensation amount. Almost all leading financial institutions of UK are dealing with mis sold PPI claim compensation. Barclays a leading banking institution of UK has reported that the company is facing financial losses in comparison of previous year. Company has announced that its pre-tax profits come down of 33%. It is at £2.6 billion that is much lower in compare of earlier year.

Bank has also stated that it is receiving much lower from investments in commodities and bonds. And the company is also facing financial burden due to settlement of PPI claim(http://www.ppiclaims.uk.com/) compensations. Company is in charge of £1 billion for payment protection insurance settlement.

Another UK bank HSBC has also announced about its pre-tax profits in current financial year. Bank has reported that in first six months of this year the company has earned £11.5 billion profit that is 3% up in compare of previous year.

Barclays have also stated about some of its profit sources. This financial institution receives most of its profit from commodities and bonds investment. Barclays capital is its investment banking division which also include some parts of Lehman Brothers that is a former US bank. This investment division adds most of the profits in Barclays business. But profit of this division has also fell 9% and ends up with just £2.3 billion. Chief Executive Bob Diamond of Barclays bank have said that it is really pleasing result in lackluster economic environment. In spite of lower profit company is not depressed because everything that happens is due to adverse economic environment.

Alike Barclays, other banking institutions involved in PPI(http://www.ppiclaims.uk.com/payment-protection-insurance/) are facing profit falls. It has been concluded by global financial situations as well as losing trust of consumers is main reason behind low business made by the financial firms. Banks are also facing extra expenses and financial burden due to PPI compensation payments. It has really become difficult for this financial institution to manage business with so many adverse business situations.

However, bank has already set aside some amount for mis sold PPI(http://www.ppiclaims.uk.com/mis-sold-ppi/) refunds. It will help to manage with PPI refunds and bank can concentrate on its financial business dealings. In spite of business profit fall, Barclays official has stated that they have done a good business. He has give reason behind this statement that it was quite difficult to maintain profit with such adverse economic circumstances.