Barclays admits Imry error

BARCLAYS has admitted for the first time making serious errors over its loans to Imry, the property company.

Last week, the bank was forced to write off pounds 240m of the loans, the largest such loss in its history. It blamed the move on the slump in property values.

But Humphrey Norrington, the Barclays vice-chairman in charge of risk management, said 'corporate misjudgement' was also to blame.

'We completely misjudged the property market,' he told the Independent on Sunday.

The bank, he said, had conducted an internal investigation into the debacle. It had found 'all kinds of things' that were wrong, which he would not specify.

'We didn't think the property market would fall as fast as it did. It was a major misjudgement.'

He said that Barclays should not have, in effect, made itself the sole lender to Imry. Barclays' total exposure to the privately owned group amounted to pounds 440m, making it the biggest-ever property loan by a single British bank.

'We should not have taken on to our books so large a proportion of the risk,' admitted Mr Norrington.

When asked whose responsibility that was, he said, pointedly: 'It was the general fault of many of us.'

According to Mr Norrington, Barclays first thought Imry might prove a problem at the end of 1989. He said that Andrew Buxton, the chief executive and chairman designate, had been 'appraised of the situation'. In July last year, despite the worries, Barclays doubled its exposure to the property company.

The problems came to a head in August this year when Castor Holdings, a Canadian finance company controlled by Wolfgang Stolzenberg, Imry's chairman, collapsed with debts of Cdollars 1.8bn ( pounds 800m).

Mr Norrington said the bank's due diligence on Mr Stolzenberg had been 'very little - although, I can assure you, we know a lot about him now'.

Mr Norrington's remarks are bound to increase the pressure on Mr Buxton, who faces mounting fury from shareholders over the bank's performance ahead of taking over the chairmanship on 1 January.

'My feeling is that Mr Buxton is too tainted to become chairman,' said one leading shareholder. 'He has lost too much credibility and has become a lame duck.'

Following earlier pressure from shareholders, Mr Buxton has already agreed not to combine the roles of chief executive and chairman, but to relinquish the former when he becomes chairman.

Shareholders are expected to press Barclays for an explanation of how the huge losses on Imry came about and, particularly, how the bank came to make a pounds 440m loan to one company.

Barclays has so far made little effort to explain itself to shareholders.

'We've had no explanation from Barclays so we will probably ask for some information next week,' a shareholder said on Friday. 'Who was responsible for what went on? It's very difficult to get to the bottom of it.'

Equally worrying for Barclays is the growing disquiet among branch and regional managers over the bank's problems and the new chairman. Many are angry at the controversy at the top of Barclays and are questioning whether Mr Buxton would have been appointed chairman if he had not been one of Barclays' 'ruling families'.

Mr Norrington admitted manager morale had been damaged by the Imry episode. One solution was to tighten lending procedures. 'We will be taking a more technical approach to judging winners and losers from now on. We want to give back to our managers, who are suffering from a lack of confidence, the mechanism to start lending again.'

An increasing number of institutional shareholders believe that Barclays is almost certain to cut its dividend at the end of the year, and they would support such a move.

'There is now a 75 per cent chance of a cut, but that's good,' said one. 'We like companies to reflect their prospects and Barclays' prospects are not good.'

Another said: 'The Imry announcement hastens the dividend cut. We're pretty certain they'll do it and it is right to do so.'

(Photograph omitted)

PROMOTED VIDEO
News
Johnny Handle, Northumberland, Ted Relph, President of Lakeland Dialect Society, and Sid Calderbank, Lancashire, founder of the National Dialect Day
newsMeet the enthusiasts determined to stop them dying out
News
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Sport
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
News
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
News
ebooksNow available in paperback
Arts and Entertainment
St Peter’s Seminary in Cardross. Argyll, has remained derelict for more than 25 years
arts + ents
News
people

Watch the spoof Thanksgiving segment filmed for Live!
Sport
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
books
Sport
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game