Barclays to take pounds 76m charge after B&C settlement agreed

BARCLAYS BANK, whose chief executive Martin Taylor quit last month, is to take a pounds 76m charge against its 1998 results after agreeing to an out-of-court settlement with the administrators of British & Commonwealth Holdings, Ernst & Young.

B&C,which had been built up by buccaneering entrepreneur John Gunn in the 1980s, crashed in 1990, leaving behind it pounds 1.3bn in debts. The circumstances of the collapse were later the subject of a Department of Trade and Industry report.

Barclays could have faced claims of up to pounds 1bn arising from the role of BZW, its former subsidiary, in advising on the disastrous acquisition by B&C of Atlantic Computers in 1988. The case had been due to come to court in May next year. Proceedings were expected to last 15 months.

The full cost to Barclays of the total pounds 150m settlement is pounds 116m. However, the bank hopes that pounds 40m of that will be covered by insurance.

News of the fresh profits charge comes just weeks after Barclays warned that profits for the year would be pounds 1.9bn, well below what most in the City had been expecting. The 1998 profit figures are due out in mid-February.

Analysts said that it was just another negative item of news at the end of what for Barclays Bank could only be described as an "annus horribilis". However, they were relieved Barclays could now draw a line under the B&C affair.

Richard Coleman, banking analyst at Merrill Lynch, the investment bank, said: "Barclays was always going to lose. It was the only one that had any money. It is one of the ghosts of the past and has been laid to rest."

The deal with Barclays and the other parties involved, which include NM Rothschild, the merchant bank, former auditors Spicer & Pegler, and accountants Coopers & Lybrand, was struck after a private mediation by the former law lord, Lord Griffiths.

Following the settlement, the administrators expect to pay out a further dividend to banking creditors of 3p in the pound, as a result of which they will have had their claims excluding interest fully met. The non- banking creditors can expect a further payout of up to 40p, which will bring the total recouped for this category of creditors to 86p in the pound.

Ironically, the largest creditor is Barclays, which took a pounds 100m provision in 1990 to cover its B&C loans.

Ernst & Young said yesterday that the amount that will have been paid out to creditors vastly exceeds the original estimates of what was recoverable.

Barclays shed 4p to 1,424p.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
PROMOTED VIDEO
Sport
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Sport
football
New Articles
i100... despite rising prices
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam