(GUA) Barclays Bank charged again by SFO over £2.2bn Qatar loan

(GUA) Charges relating to emergency fundraising in 2008 follow case against parent company last year.

A branch of Barclays
 The SFO has charged Barclays Bank in regard to a loan provided to Qatar in 2008. Photograph: Joe Giddens/PA

The Serious Fraud Office (SFO) has charged Barclays for a second time over a $3bn (£2.2bn) loan the bank made to Qatar when Middle East investors bought shares in the bank to prop it up at the peak of the financial crisis.

The SFO has extended its case against Barclays’ holding company to Barclays Bank plc, the lender’s operating company. The decision raises the pressure on Barclays because banking licences and regulatory approvals are held at the operating level.

The additional charge is the latest move in an SFO case dating back to 2012. Last year, the SFO charged Barclays’ parent company, its ex-chief executive, John Varley, and three former senior bankers with offences linked to the bank’s £11.8bn emergency fundraising in 2008.

The SFO charged Barclays and the former employees with conspiracy to commit fraud by false representation. The offences carry a maximum prison sentence of 10 years for the individuals and a fine for the bank’s holding company.

Prosecuting Barclays at the operating level means that, if found guilty, the bank could face regulatory penalties, including withdrawal of its banking licence. Investment banking counterparties might also decide not to trade with Barclays.

Withdrawing Barclays’ banking licences would be highly unusual and would have consequences for the UK economy as well as millions of customers. As one of Britain’s biggest high street lenders, Barclays had £166bn worth of UK customer loans and £189bn in deposits at the end of 2016.

The SFO said: “The charges relate to financial assistance Barclays Bank plc gave to Qatar Holding between 1 October and 30 November 2008, which was in the form of a $3bn loan for the purpose of directly or indirectly acquiring shares in Barclays plc.”

When the banking sector was threatened with collapse 10 years ago, Barclays raised capital from Qatari backers and other investors. The investment allowed the bank to avoid a government bailout that resulted in Lloyds Banking Group and Royal Bank of Scotland being part-nationalised.

The SFO has had the option of bringing a second charge against Barclays since charging the bank last June. Barclays appeared to be ready to resist further pressure, saying its operating and holding companies would defend the charges in court.

“Barclays does not expect there to be an impact on its ability to serve its customers and clients as a consequence of the charge having been brought,” the company said in a statement.

The charges against Barclays were the first criminal charges to be brought in the UK against a bank and its former executives for activities during the financial crisis.

Barclays is under different leadership and has spent the past few years trying to repair relations with regulators and the government since the Bank of England ousted Bob Diamond, Varley’s replacement as chief executive, in 2012. But for the SFO’s purposes the bank remains the same.

The SFO said on Monday that a date for the first court appearance in relation to the charge against Barclays Bank would be “set in due course”. The full trial is expected to start in 2019.