Barclays share price: GPs sue lender for £4m

on Jul 4, 2016
Updated: Mar 11, 2020

Three doctors are suing Barclays (LON:BARC) for £4 million, The Sunday Times has reported. The doctors claim that the bank mis-sold them a complex financial product which ended up costing their practice millions of pounds.

Barclays’ share price surged on Friday, adding 1.01 percent to close at 140.00p, largely in line with gains in the broader London market, with the benchmark FTSE 100 index adding 73.50 points to end the session 1.13 percent higher at 6,577.83 amid hopes that the Bank of England would move to launch fresh stimulus following the UK’s vote in favour of leaving the European Union. The group’s shares, however, have lost more than 46 percent of their value over the past year.

The Sunday Times reported yesterday that Barclays had sold the interest rate swap to Dr Isobel Bleehen and her two partners in 2007, when the doctors obtained a £5.2-million loan to expand Pinn Medical Centre in Pinner, northwest London. While the derivative was meant to protect them against a rise in rates, when the cost of borrowing was slashed in the aftermath of the 2008 banking crash, the doctors were hit with crippling charges.
The newspaper noted that Barclays had admitted mis-selling the swap, noting that the doctors “were not provided with sufficient information to understand the features, benefits and risks”. It, however, concluded that the doctors would have taken out the product regardless and declined to give them redress.
“If we knew the consequences, we wouldn’t have touched a product like that,” Bleehen told The Sunday Times. The doctors have been set a court date for July next year.
The lawsuit comes at a sensitive time for Barclays whose shares have been under pressure since last month’s Brexit referendum. The group’s chief executive, however, commented last week that the hefty fall in Barclays’ share price had been caused by concerns about earnings, rather than capital liquidity.
As of 08:01 BST, Monday, 04 July, Barclays share price is 140.00p.