The details of both were revealed in a prospectus the bank published on Monday ahead of a £6bn rights issue. We'd forgive chief exec Antony Jenkins for wanting to go back to bed...
The Qatari affair centres on fees Barclays paid to an arm of the country's sovereign wealth fund, Qatar Holding, in order to secure its support for crucial rescue fundraising in 2008 during the financial crash.
Barclays paid £322m in fees to Qatar, which it reported as ‘advisory fees’. Qatar went on to invest £4.6bn in Barclays at the height of the financial crisis.
The move helped Barclays avoid having to take a government bail-out – something it was eager to steer clear of. The amount of capital Barclays raised at the time totalled at £11.8bn – a pot of gold neither Lloyds nor RBS managed to secure to avoid part-nationalisation.
But the ‘advisory fees’ have pricked ears up at the FCA. It has accused Barclays of not properly disclosing the transfer of money. The financial watchdog reportedly believes the fees were ‘not to obtain advisory services but to make additional payments, which would not be disclosed, for the Qatari participation in the capital raisings’.
The FCA responded that Barclays had acted ‘recklessly’ and has threatened to impose a £50m fine for breaching ‘certain disclosure related rules.’ Barclays has disputed the fine – claiming ‘advisory fees’ don’t have to be disclosed. The FCA has pointed out it doesn’t believe the £322m was an advisory fee at all.
The FCA isn’t the only regulatory muscle digging into Barclays’ dealings with the Qataris. The Serious Fraud Office, the US department of Justice and the US Securities and Exchange Commission are investigating claims Barclays ‘induced’ Qatar into ploughing funds into the bank during the height of the crisis.
The FCA announced it would be investigating Barclays over its Qatari cash injection back in June. The whole ‘£322m advisory fees’ shebang wasn’t revealed until yesterday, when Barclays released the prospectus for its rights issue, which was designed to plug its capital shortfall.
It’s the last thing Jenkins needs as he tries to clean up the image of the bank, having taken the helm just over a year ago.
Every time he tries to draw a line under the bank's dismal past, more skeletons come rattling out of the cupboard: he's also fighting fires relating to mistakes made on 300,000 customers’ paperwork. The errors, to do with personal loan customers, are expected to cost the bank £100m in refunds.
Add that to the £290m the bank has paid in fines for manipulating Libor, £2.6bn in compensation for mis-selling PPI and £850m in compensation for businesses that were mis-sold products to protect them against interest rate rises.
It never rains but it pours...