Barclays on Thursday saw a slump in second-quarter profit after taking a substantial provision relating to a costly trading error in the U.S.

The British bank reported a £1.071 billion ($1.30 billion) net profit attributable to shareholders, meeting expectations of £1.085 billion expected by analysts, according to Refinitiv. However, it marked a 48% slump from the same period a year earlier.

Barclays took litigation and conduct charges of £1.9 billion for the first half of the year, including a £1.3 billion cost related to what the bank calls the “over-issuance of securities” in the U.S.

The British bank announced earlier this year that it had sold $15.2 billion more in U.S. investment products — known as structured notes — than it was permitted to.

The £1.3 billion in litigation and conduct charges booked in the second quarter were “substantially offset,” according to the bank, by a hedge which generated income of £758 million.

They include the cost of repurchasing the excess notes and an estimated £165 million monetary penalty from the SEC.

Barclays also put £165 million aside in order to settle with regulators over an investigation into the use of communication tools by staff across the finance industry.

The charges, along with the appreciation of the dollar against the British pound, led Barclays to increase its projected full-year operating expenses to £16.7 billion from the previous outlook of £15 billion.

Other highlights for the quarter included:

• Group revenues up to £6.7 billion, from £5.4 billion a year ago.
• CET 1 ratio, a measure of bank solvency, coming in a 13.6%, down from 13.8% in the first quarter.
• Total operating expenses were £5 billion, up from £3.7 billion in the second quarter of 2021.

Barclays shares will begin Thursday’s trading down over 15% on the year amid wider concerns over interest rates, inflation and a slowdown in growth.

CEO C.S. Venkatakrishnan (known as Venkat) said the bank had achieved a “strong first half,” with group income up 17% and a return on tangible equity of 10.1%.

“The broad-based income growth that we achieved in the first quarter continued across all three operating businesses into the second quarter,” Venkat said.

“Our performance in the first half shows the resilience and advantage that diversification at all levels brings, both across the bank and within our businesses.”

Venkat took over the reins of the bank in November 2021 after long-time CEO Jes Staley resigned following an investigation by regulators into his relationship with Jeffrey Epstein.