Barclays is braced for a bill of more than £2 billion after increasing the amount of money set aside to settle a foreign exchange rate-rigging investigation.
The banking giant made another £800 million in provisions in relation to the scandal, which has already resulted in six other lenders being fined £2.6 billion by global regulators.
Barclays has also taken an additional £150 million towards redress for the mis-selling of payment protection insurance (PPI), lifting its total provision for the long-running case to £943 million.
The items overshadowed the latest results from the bank after it posted a 9% increase in pre-tax profits to £1.85 billion for the first quarter of the year.
Chief executive Antony Jenkins said: "Resolving legacy conduct issues is an important part of our plan to transform Barclays.
"We are working hard to expedite their settlement and have taken further provisions of £800 million this quarter, primarily relating to foreign exchange.
"While we still have much to do, I am pleased with how we've begun 2015."
The bank chose not to enter into settlements last November when other lenders were punished by regulators including the Financial Conduct Authority.
It is seeking a ''more general coordinated settlement'', with other authorities in the US still investigating.
Barclays has been reviewing its foreign exchange trading over a period of several years and is continuing to co-operate with relevant bodies. It has warned that these investigations could result in ''substantial monetary penalties'', with today's results taking provisions for potential litigation above £2 billion.
The improved performance from Barclays was driven by its investment banking arm, which improved profits by 37% to £675 million.
Personal and corporate banking also lifted by 14% to £787 million.
However, the additional provisions of more than £1 billion meant the group's bottom-line profits for the quarter were down 26% to £1.3 billion.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "On the face of it, Barclays has delivered an update which underscores the progress it continues to make towards becoming a leaner, fitter entity.
"The clear fly in the ointment is the additional provisions undertaken for the forex investigation and litigation, as well as the seemingly perennial PPI situation.
"The fact that these are being made are further proof if it were needed that the bank is still some way from distancing itself from the legacy conduct issues prevalent in the sector."
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