Barclays passes up discount to fight Qatari funding fine

 

Barclays is continuing to fight the City watchdog’s attempt to fine it £50m over the Qatari fundraising that staved off a taxpayer-funded bailout during the financial crisis.

The bank admitted the looming penalty as it unveiled final details of a deeply discounted one-for-four, right issue. The new shares are being offered at 185p to raise £6bn, designed to bolster Barclays’ capital base and satisfy the demands of the Bank of England.

Barclays admitted that it had received a final warning notice from the Financial Conduct Authority, but disputes its findings and the scale of the fine. In fighting the penalty it is passing up a discount for settling early.

If the dispute continues the case could be presented to the watchdog’s Regulatory Decisions Committee, and could then be appealed before a tribunal.

While individuals who have fallen foul of the regulator have proved willing to take this step, it is much rarer for companies, and particularly big companies, to do so.

The bank revealed that it had agreed to two deals to pay advisers a total of £322m over five years for raising funds from Qatar in 2008, which raised enough cash to keep Barclays free of government involvement.

Only one of these agreements was made public at the time and the amount involved was never disclosed. The FCA argues that the payments were made direct to the Qataris, not advisers, and has accused Barclays of behaving recklessly because it was in breach of Stock Exchange listing rules.

As the Serious Fraud Office is also investigating, the watchdog’s warning notice can not be made public and the expectation in the City is still that a settlement will ultimately be reached.

News of the penalty complicated the announcement of the rights issue prospectus, but investors were just as concerned by Barclays admission that its income fell by £500m in July and August against a year ago, which leaves its income so far this year down 5 per cent on the same point in 2012.

It said its investment banking income in the past two months had been significantly below the same months in 2012.

Ian Gordon, an analyst at Investec, said: “Frankly, from a purely financial perspective, we regard £50m as a source of relief! We were forecasting a decline from £7bn in quarter three 2012 to £6.8bn in quarter three 2013, so the outturn appears worse, with Barcap income ‘significantly below’ July-August 2012. In this context, underlying costs being ‘on track’ to meet an £18.5bn target offers little consolation.”

However, Mr Gordon thinks Barclays will have better news on the cost-cutting front.

Barclays shares eventually finished the day up 3.8p at 305.4p. That means that the rights issue, fully underwritten by Credit Suisse, Deutsche Bank, BoA Merrill Lynch and Citi, is not in any doubt.

Five troubled years: Barclays timeline

2008

Barclays sells £12bn-worth shares to investors rather than turn to the Government for a bailout during the financial crisis. Challenger and a subsidiary of the Qatar Investment Authority, run by the Gulf state’s prime minister, Sheikh Hamad bin Jassim bin Jaber al-Thani, put up more than £6bn

2009

Barclays sells its asset management arm to the US fund manager Black Rock in December for $15.2bn (£9.5bn)

2010

Global regulators launch investigations into allegations of Libor manipulation by banks including Barclays

2011

1 January Bob Diamond takes over as chief executive at Barclays from John Varley

2012

June  Barclays is fined $453m in settlement with US and UK regulators over manipulating Libor rates

July 3 Bob Diamond resigns

18 August UK parliamentary report says Barclays company culture is “deeply flawed”

29 August The Serious Fraud Office opens criminal inquiry into payments between Barclays and a subsidiary of QIA

30 August Antony Jenkins becomes chief executive

2013

Sept Barclays admits it is fighting a £50m Financial Conduct Authority fine for breaching listing rules when it raised capital from Qatari investors

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
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

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific