The Serious Fraud Office (SFO) has charged Barclays’ (LON:BARC) operating arm over the lender’s Qatar fundraising during the financial crisis when the group turned to Middle Eastern investors to avoid a state-funded bail-out. The move comes after the SFO charged Barclays’ holding company over the fundraising last June.
Barclays’ share price has advanced in today’s session, having jumped 1.22 percent to 195.25p as of 09:22 GMT. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index having added 1.27 percent to 7,182.80 points so far this morning. The group’s shares have lost more than 14 percent of their value over the past year, as compared with a near one-percent dip in the Footsie.
SFO charges Barclays Bank
The SFO announced in a statement today that it had charged Barclays Bank “with unlawful financial assistance” in relation to a $3-billion loan the lender secured for Qatar Holding between October 1 and November 30, 2008, for the purpose of acquiring shares in the blue-chip group.
The BBC notes that Barclays took a £12-billion loan from Qatar Holding, owned by the Gulf state, in 2008 to avoid a state-funded bailout and under the deal, loaned £2.3 billion back to Qatar Holding. The SFO opened an investigation into the deal in 2012 and has since charged several former executives and Barclays Plc over the fundraising.
The FTSE 100 lender announced in a statement that both Barclays Plc and Barclays Bank Plc intended to defend the respective charges brought against them, and that the company did not anticipate an impact on its ability to serve customers as a result of the charges.
Analysts weigh in
Reuters quoted analysts at Keefe, Bruyette & Woods as saying that while it was unhelpful for Barclays that the SFO has added charges, it should not change the dynamics of the case materially.
“However, it is negative that the group hasn’t been able to settle a number of outstanding litigation issues, with outstanding litigation representing an unhelpful distraction to the management of the core franchise,” the broker pointed out in a note to clients.