Barclays fined £40m over 'reckless' 2008 Qatar deal
By Frank Prenesti
Date: Monday 25 Nov 2024
(Sharecast News) - Barclays Bank has been fined £40m by Britain's financial regulator over alleged secret payments to Qatar during the 2008 global financial crisis to avoid a UK government bailout.
The Financial Conduct Authority said the bank had pulled an appeal - due to be heard on Monday - against a provisional £50m fine laid down in 2022 when it found Barclays was "reckless and lacked integrity".
As malfeasance by the banking industry brought the financial system to near collapse, Barclays allegedly paid £322m to the Gulf oil state in exchange for a £4bn investment as part of a plan to raise £12bn to avoid a bailout that could have seen the lender coming under UK government control.
Critics of the deal said it allowed Qatar to buy a stake in Barclays shares at a big discount not offered to other investors. The Qatar Investment Authority still owns 2.9% of the bank.
"Barclays' misconduct was serious and meant investors did not have all the information they should have had," the regulator said on Monday.
The UK government spent more than £137bn of taxpayers cash in loans and capital to prop up the banking system along with £1trln in guarantees to restore confidence in the system. It bailed out Lloyds Bank and the former Royal Bank of Scotland - rebranded as NatWest Group.
In its findings, the FCA said the Barclays board was keen to avoid accepting the offer of government capital, because it would hinder the bank's ability to pay dividends and bonuses to its executives.
In 2020 three former Barclays bankers accused of funnelling the fees to Qatar in exchange for emergency funding were found not guilty of fraud.
It was the only criminal case brought against UK banking executives for their actions during the financial crisis. The case, which was brought by the publicly funded Serious Fraud Office, cost the taxpayer £9m-10m. No-one in the US or UK banking industry was ever prosecuted for actions that left taxpayers on the hook for billions.
An unrepentant Barclays on Monday said it still disagreed with the FCA's decision.
The bank in February reported annual profits for 2023 of more than £6bn and unveiled plans to return £10bn to shareholders.
Reporting by Frank Prenesti for Sharecast.com
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