FTSE:5,942.69 (–34.08) Mid-250:11,896.09 (–11.15) Small Cap:3,270.84 (–5.48)

FINANCIAL STOCKS suffered further losses yesterday after Barclays became the latest bank to enumerate its exposure to the mis-selling of payment protection insurance.

Barclays shares fell 1.8 per cent to 272½p after it announced it would take a charge of £1 billion (€1.14 billion) in the second quarter to cover costs relating to its mis-selling of payment protection insurance.

The bank confirmed it would not appeal against the recent High Court decision against a case brought by the British Bankers’ Association seeking a judicial review of the Financial Services Authority’s decision on how PPI complaints should be handled.

HSBC’s shares slipped 0.6 per cent to 648.1p after its quarterly trading update missed forecasts.

“Today’s numbers from HSBC were slightly concerning regarding the jump in costs the bank has endured, said Giles Watts, head of equities at City Index.

“Aligned with this was news that, alongside Barclays, the two banks were setting aside a combined $2 billion to cover liabilities when they mis-sold payment protection insurance. This tows a similar theme and large cash provision announced by Lloyds Banking Group last week,” he said;

Overall, the FTSE 100 fell 34 points to 5,942.69, a fall of 0.6 per cent. The losses came after the index finished the previous trading week 1.5 per cent lower.

Centrica was the biggest single faller on London’s benchmark index, down 3.8 per cent at 303½p, after it warned that the pace of its earnings growth would be slower than previously thought due to the government’s decision to increase taxes on the sector in the March budget.

It also said that the tax meant it would reduce the planned level of investment in the UK.

Inmarsat rose 4.4 per cent to 619p and the top of the FTSE 100 after the satellite communications provider’s first-quarter results met forecasts, rising 23 per cent to $204.1 million.

The company’s spectrum-sharing agreement in North America, LightSquared, helped drive the growth.

Platinum smelter Lonmin rose 0.8 per cent to £15.62 after it repeated its existing profit guidance for the full year after interim operating profit more than doubled to $144 million. – (Copyright The Financial Times Limited 2011)