Barclays Bank added to SFO charge sheet over Qatar loan

Barclays' core banking business has been charged by the Serious Fraud Office over its fundraising deal with Qatar at the height of the financial crisis, adding to the charges already brought against the parent holding company and four former executives.

The SFO last June hit Barclays Plc with a charge of conspiracy to commit fraud over the emergency cash call in 2008, including an offence of unlawful financial assistance in relation to the $3bn loan provided Qatar.

On Monday, the SFO charged Barclays Bank Plc with unlawful financial assistance in respect of the loan, having in June not made a decision as to whether it would also bring charges in relation to the loan the banking division too.

Barclays said both its parent Plc and Barclays Bank Plc intend to defend the respective charges brought against them. "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," it said in a statement.

In June 2008, just a few months before US investment bank Lehman Brothers went under, Barclays drummed up £4.5bn of crucial cash, followed by a further £7.3bn just a few months afterwards from several investors, including Qatar Holding, which allowed it to avoid having to go cap-in-hand to the government as rivals Lloyds and RBS were forced to do.

Barclays then loaned back $3bn of funds to the state of Qatar just weeks after announcing the fundraising deal was of the same amount as the debt component of the Qatar Holding’s investment. Under the Companies Act 1985, it is unlawful for a bank to lend itself money — the legal term for which is financial assistance.

Although not initially disclosed until after the capital was raised, Barclays later revealed that it paid about £322m in "commission payments" to Qatari investors, which was argued by analysts be an overly generous encouragement for hugely rich investors to buy debt that was paying a very generous 14% rate of interest until June 2019.

Barclays shares were up by less than a penny to 193.8p mid-morning on Monday. In November the bank's shares hit a 52-week low of 177.3p.

Investors were "clearly unfazed" by the bank 's operational arm being charged, said market analyst Jasper Lawler at LCG. "History shows these kinds of charges are more a boon for lawyers than any serious threat to a bank’s ability to do business."