PPI, pay revolts and Libor manipulation
Barclays first half profits dropped 33%, as it was forced to set aside £1bn to pay customers that had been mis-sold payment protection insurance.
Barclays was ordered to pay £500m in tax, which it had attempted to avoid. The bank had used two schemes which the government branded “highly abusive” and closed down retrospectively. Barclays argued that it was not the only bank using the scehems and complained to MPs about about the “unnecessary damage” inflicted on the bank’s reputation by the government’s move.
It is revealed that Barclays chief executive, Bob Diamond, received £17m in pay and bonuses – plus £5.7m from the bank to cover his personal tax bill – when Diamond himself had described the bank’s financial performance as “unacceptable”.
Business secretary Vince Cable was unimpressed. He said: “The facts are very clear, this is a company that paid out three times as much in bonuses to its top executives as it paid out to its own shareholders”.
Nearly a third of shareholders failed to back the remuneration report at Barclays annual shareholders meeting. Alison Carnwath, the director who monitors directors’ pay, was heckled when she spoke and failed to get the backing of 22.5% of investors who voted. That is a big vote against an individual.
Barclays admits it will have to set aside a further £300m to pay claims for mis-sold payment protection insurance.
Fined £59m by the FSA for manipulating Libor rates for profit. The FSA say the fine would have been £85m if Barclays had not co-operated. Diamond – who ran the part of the bank that was doing the manipulating – volunteers, with three other senior staff, to forego this year’s bonus. There is no hint he will repay bonuses run up in the years when his division was regularly breaking Libor rules.
Barclays is expected to face further problems when details are published of an investigation into the mis-selling of complex financial products to small businessmen. The bank has already admitted wrongdoing.
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