BARCLAYS SHARES shrugged off two new setbacks yesterday as the disclosure of a £450 million mis-selling charge and an investigation into its finance director was offset by a better than expected underlying performance in the first six months of 2012.

The bank – which apologised again for the regulatory issues and senior departures that have rocked it in recent weeks – said first-half pre-tax profits fell 71 per cent to £759 million.

Part of that decline was because of the newly quantified cost of compensating small and medium-sized businesses mis-sold interest rate hedging products.

Barclays was one of four banks to agree a settlement with the Financial Services Authority, the City watchdog, in June over the mis-selling of interest rate swaps to SMEs. At the time, Barclays said: “It is currently anticipated that the financial impact of remediation costs will not be material to the group.”

However, the first-half results released yesterday included a £450 million provision related to the “review and redress exercise” agreed with the FSA, although it said £100 million of this was expected to unwind eventually.

Barclays disclosed that the FSA had begun an investigation into four current and former senior employees, including Chris Lucas, finance director.

It said the probe was into the “sufficiency of disclosure in relation to fees payable under certain commercial agreements and whether these may have related to Barclays Capital raisings in June and November 2008”. The bank reckoned it had satisfied its disclosure obligations.

The steep fall in Barclays’ statutory pre-tax profit was mainly attributable to a £2.95 billion “own credit” accounting loss on the fluctuating value of its issued debt. It had to absorb an already-announced £300 million charge related to the mis-selling of payment protection insurance, an industry-wide scandal.

However, on an underlying basis that excludes the “own credit” accounting distortion and other items, first-half pre-tax profit rose 13 per cent to £4.23 billion, ahead of forecasts.

Barclays rose in morning trading in the wake of this outperformance. – Copyright The Financial Times Limited 2012