Barclays faces new capital raising probe - Gulf Daily News

LONDON: Barclays revealed a new regulatory probe and more US lawsuits yesterday, making it harder for the British lender to rebuild its reputation damaged by the central role it played in the interest rate-rigging scandal shaking banks.

Despite these latest blows, Barclays' profit of more than £4 billion ($6.3bn) in the first six months of the year beat forecasts.

The bank said its performance during July was ahead of last year and there had been no exodus of clients, sending its shares up more than 7 per cent.

Barclays said Britain's financial regulator had started an investigation into the bank and four current and former senior employees, including finance director Chris Lucas, on whether the bank made sufficient disclosures about the fees it paid in a 2008 capital raising.

The fees were payable under commercial agreements related to deals in June and November 2008.

It agreed to get advisory services from Qatar Investment Authority and explore a relationship with Japan's Sumitomo Mitsui Banking Corporation (SMBC).

Barclays raised £4.5bn in June 2008, including from SMBC, followed by a £7bn cash call in November that year from Qatar and Abu Dhabi investors to avoid taking a government bailout.

The bank has said it paid £300 million in fees on the latter deal.

Roger Jenkins was the main architect of that fundraising.

He left Barclays in early 2009, setting up a Middle East advisory boutique.

He is now with Brazilian investment bank BTG Pactual. Jenkins declined to comment.

The investigation, which the FSA has started in the past month, does not regard payments to Barclays staff, people familiar with the matter said.

Barclays also faces more US lawsuits after a record £290m fine last month for rigging the Libor interest rate benchmark, sparking fierce criticism about its culture and risk-taking.

More than a dozen other banks are expected to be drawn into the global Libor investigation and could also be fined.

An inquiry by UK legislators into the Libor scandal showed that Britain's financial regulator had warned Barclays four months earlier that its culture was too aggressive and must change.