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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Church: Barclays ‘let down society’

Category : World News

The Church of England has criticised the conduct of Barclays in its annual report, after a year dogged by scandal and resignations at the bank.

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Barclays first quarter profits fall 25%

Category : Business

Barclays adjusted first quarter profits fell 25% to £1.8bn, largely due to the bank’s restructuring programme.

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Sometimes even chief executives get sick of being force-fed bonuses

Category : Business

Shareholders are gearing up for another rebellion on pay, but it’s non-executives who bear the lion’s share of responsibility

Take a deep breath. Could we be seeing an outbreak of morality among the corporate elite? Next’s chief executive, Lord Wolfson, announced last week that he is sharing out his £2.4m bonus among his retailer’s 19,400 staff; the head of one of Austria’s biggest banks – Herbert Stepic of Raiffeisen – has handed back £1.2m of his pay on the grounds that he is overpaid; and the incoming head of miner BHP Billiton, Andrew Mackenzie has taken a 25% cut to his salary.

In these austere times – GDP data next week will show whether the UK has sunk into an unprecedented triple-dip recession – an acknowledgement by top bosses that they are overpaid should be embraced. Or should it?

Take Mackenzie of Billiton. Even with the 25% cut in his pay, his salary is still £1.1m before any bonuses. Wolfson, a Tory peer and Conservative party donor, still enjoyed a 13% rise in basic pay to £4.6m at Next (the store’s staff got 2%). The Austrian bank boss still walked away with more than £2m.

And, as is usual with executive pay, there are many more bosses grasping for more. The attempts at restraint demonstrated by BHP’s boss contrast sharply with the behaviour of Xstrata’s departing Mick Davis. He is walking away with £75m as a result of the takeover by Glencore – a staggering £9.6m of which is to be handed to him in cash rather than shares. Similarly, compare Stepic’s gesture of goodwill with Barclays, where the much-welcomed retirement of Rich Ricci seems unlikely to stop millions of pounds of previously awarded bonus deals continuing to flow to him as he enjoys his retirement – which is beginning at the age of 49.

Ricci is a symbol of anything but restraint. This is the man who was handed £17m under the cover of this year’s budget – when Barclays seemed to hope attention would be focused on the chancellor’s speech – taking his earnings since 2010 to over £70m.

The announcement of Ricci’s retirement came just a few days before the bank’s annual meeting with investors this Thursday. The hope is that it will take the heat out of an uncomfortable few hours for new chief executive Antony Jenkins. Remember the fuss last year– even before the Libor crisis had struck – when Bob Diamond was at the helm? Diamond also had unimaginable wealth but was determined to take a bonus for 2011. Almost a third of Barclays investors failed to support the remuneration report.

That rebellion heralded last year’s “shareholder spring”, during which an unprecedented number of remuneration reports were voted down and a number of bosses ousted after years of being overpaid for underperformance.

There are signs that this year could see a replay. Standard Life has angrily criticised the pay policies at BP, and fund manager Jupiter – which itself polices pay policies – suffered a serious humiliation on Thursday, when 42% of investors failed to back its own remuneration report. Corporate governance expert Manifest reckons that any dissent of more than 10% is something for a management team to worry about.

Governments keen to pass the buck on the pay controversy point at shareholders to keep a lid on pay excess, but non-executive directors have at least an equal responsibility. Bonus schemes that pay out so much that their bosses are embarrassed to take the proceeds should never have been approved. Directors on remuneration committees need to think much longer and harder about how bonuses are handed out.

And then there are the executives themselves. Wolfson, Stepic and Mackenzie are to be applauded. But the loudest cheer should be reserved for those executives ready to acknowledge that they do the job to their best ability regardless of the bonus attached. Shell’s former chief, Jeroen van der Veer, once admitted his work would have been the same regardless of his bonus arrangements. Surely he cannot be the only one.

Npower’s tax bill may be justified, but its record isn’t glowing

Almost 90,000 people have put their names to an online petition for RWE npower to pay more corporation tax more in line with the rest of the business community. Revelations last week that npower – one of the Big Six energy providers – had paid “almost nothing” (just £5m) over three years understandably infuriated many.

Comparisons have been made with Starbucks, which faced similar protests and eventually decided to make a £20m ex gratia payment to the taxman.

Will npower have to do the same? Maybe, but the energy company is in a rather different position from the US-based coffee chain, not least because it has invested much more heavily in Britain. The German-owned company has spent almost £5bn over recent years putting in place new gas-fired power stations and wind farms.

Npower is legitimately able to write off some of the cost of those investments against its profits in Britain, where it has more than 6.5 million gas and electricity customers. Certainly, Britain needs new lower-carbon power stations rather more urgently than it needs caramel macchiatos.

It is more vulnerable to criticism over an estimated £350m of “interest payments” from the British company to the German parent. Npower argues that this is just good business: the British arm can borrow money for infrastructure building more cheaply from its colleagues in Essen.

But critics, including crusading tax experts such as Richard Murphy, say there is no difference between such “interest” and the “royalties” paid by Starbucks for use of the brand name, which triggered the coffee crisis.

And there is still no need for any of the Big Six to give regulator Ofgem anything other than retail and generation profits. Yet sitting in between these two are big trading divisions.

The real problem is that npower and the rest have been tarnished by a string of Ofgem fines, criticism over tariffs that seem designed to baffle, and some executive pay excess. Few feel inclined to give them the benefit of the doubt when a tax row breaks.

Departing lingerie boss leaves Bolland looking exposed

The sudden departure of Marks & Spencer’s lingerie boss 12 weeks after her much-heralded arrival means at least six senior bosses at the ailing retailer have recently quit.

When Janie Schaffer was recruited, her appointment was described as “inspirational” . Dubbed “the knicker queen”, she had learned her trade in the M&S undies department, founded the Knickerbox chain in 1986 and for the past five years had been creative director at Victoria’s Secret in the US, injecting new glamour that has helped to haul the brand out of the doldrums.

M&S sources say that Schaffer had come to the end of a three-month probation period – with the clear suggestion that she wasn’t up to the job. Schaffer’s supporters say she didn’t have a probation period and quit because she wasn’t allowed to make even basic decisions, such as new packaging for women’s tights.

Who to believe? Who knows. But a little of the Victoria’s Secret sparkle would have been welcome at M&S, where sales of clothing and homewares have been falling for the past seven quarters. Chief executive Marc Bolland should be worried: the executive exit door is revolving fast, and he might soon find himself spinning through it.

Santander tops bank complaints list

Category : Business

Head of new Financial Conduct Authority says complaints data helps consumers and boosts competition

Santander has been named as the most complained about bank by the new Financial Conduct Authority (FCA). The Spanish-owned bank, which is advertising its 123 current account heavily at the moment, was the subject of four complaints for every one of its 1,000 banking customers during the second half of last year.

Overall, Santander had the fifth-largest number of complaints to the regulator, but the most banking problems per customer. On investments, it was the most-complained about firm with 2,236 complaints, and also received the most mortgage complaints, 14,080.

Barclays topped the new financial regulator’s figures in terms of the gross number of complaints, including banking, insurance, payment protection insurance (PPI) and other issues.

The FCA, which has just taken over from the Financial Services Authority, said that in total there were almost 3.5m complaints about financial service firms during the six months to the end of 2012 with 2.1m about mis-sold PPI. The figure was 1% higher than the first half of the year as the number of PPI complaints climbed by 5%.

There was some better news for pure banking customers. Complaints about current accounts fell 6% while problems with insurance rose by the same amount.

The figures show that Barclays was the subject of 414,302 complaints to the FSA, which is down 6% since the first half of 2012. Lloyds TSB had 349,386 (down 19%), Bank of Scotland/Halifax: 338,912 (down 7%) while Santander received 237,923 (down 1%). The card provider MBNA received a large number of complaints – 270,486 (a drop of 3%).

FCA chief executive Martin Wheatley says: “Greater transparency drives greater competition, and the publication of the complaints data lays bare the track record of the UK’s financial institutions when it comes to resolving customer conflicts.

“When I meet the bosses of the financial institutions they frequently tell me they do not want to be at the top of the table, which means they strive to improve both their sales and complaints handling processes.

“Not only does our data help consumers compare and contrast their current bank or lender, it also boosts competition among firms.”

Barclays investment bank boss quits

Category : Business, World News

The head of Barclays’ investment banking business, Rich Ricci, has resigned, the bank announces.

See more here: Barclays investment bank boss quits

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You can’t bank on getting a PPI pay-out from Barclays

Category : Business

After completing all the forms and accepting the offer, the money fails to materialise

Last year I received an offer letter on my Barclaycard PPI claim of £7,264.7 dated 10 September.

I completed the acceptance form and returned it immediately. I then changed my name due to marriage, and had to send in proof which they received in November. I have since made numerous phone calls chasing up my claim and keep being given different excuses. I can not afford to keep ringing on their premium rate number, and they are still sending me Barclaycard bills each month even though they owe me substantially more than I owe them. How can they get away with this? AA, Dalton-in-Furness, Lancashire

I have been trying to reclaim missold PPI payments from Barclays on behalf of my mother since September. So far, they have lost five recorded delivery letters after scanning them into their system.

My mother was self-employed when the policy was taken out, which Barclaycard asked us to prove as this is one of the major reasons why they uphold complaints. We have sent this evidence twice (recorded delivery) to no avail. My proposal was simple: give me the telephone number for the person who is dealing with my case and I will fax it whilst he is on the line, so he can confirm he has it. Problem solved. Not for Barclaycard. It won’t give me the person’s number and refuses to ring him. NW, Manchester

Barclays, in both cases, declares that its service “on this occasion fell below the standard we would expect” and “sincerely apologises” for the inconvenience. Its mea culpa would be more touching if it hadn’t been prompted by our intervention. Both customers have been refunded their money and given £100 each in extra compensation. Why is it I feel these are not isolated cases?

If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.

Judicial review expected into handling of small firm loan scheme

Category : Business

Department for Business, Innovation and Skills accused of retrospectively rewriting rules of loan scheme

The government is facing the threat of a judicial review into its handling of an investigation into Barclays’ involvement in a state-backed loan scheme.

An investigation into a loan made by the bank in 2006 under the small firms loan guarantee scheme was extended last month by the Department for Business, Innovation and Skills after an intervention by Michael Fallon, a business minister.

However, questions have been raised about the latest examination of evidence by the auditors RSM Tenon on behalf of the department. The loan was made to a company owned by Yorkshire businessman Jeffrey Morris who has alleged Barclays did not comply with eligibility rules imposed by the loan guarantee scheme.

“The new report makes no sense to me,” Morris said. “It is selective in the information it relies upon, it is inconsistent with itself and the evidence, it rewrites the scheme rules and it is inconclusive. The only way I can get justice for myself and the taxpayer is to seek a judicial review. I have spoken to my lawyers who believe there is a case for a much wider and fully independent judicial enquiry.”

The scheme for startup businesses, which guaranteed banks a return if their investment defaulted, has cost the taxpayer at least £200m in compensating banks. The Guardian reported on the loan in September, prompting the department to commission RSM Tenon. Papers seen by the Guardian show, allegedly, that Barclays sought collateral for the deal and gave the loan to a long-established business – actions that contravened the scheme’s terms. Morris defaulted on the loan in 2006, but Barclays reclaimed most of the balance owed – £91,667 – from the taxpayer.

Morris argues that an internal email sent by Barclays in May 2006 shows the bank had arranged a loan under the guarantee scheme for his business, Diamond Shape, even though he still had available collateral. Under the terms of the scheme, a loan could be guaranteed by the government only if the borrower had exhausted all other forms of collateral.

The new investigation examined a key email from Barclays, discussing a meeting with Morris, which indicates that the bank sought collateral for the loan. Referring to the department’s former guise as the Department for Trade and Industry, it says: “Looking for NewCo SFLG of £200k asap – this has been sanctioned by DTI. We advised we would need to see at least either share charge or property charge in place prior to drawdown.”

This suggests Barclays was seeking further collateral before making the money available to Morris, in direct contravention of the scheme’s rules. However, the new RSM Tenon report makes no mention of this part of the email. Instead, it focuses on the shares and property Morris was offering to Barclays as additional collateral. The reports admits that Mr Morris had further collateral available at the time the loan was made.

The new RSM Tenon report also appears to suggest that although the bank was seeking further personal collateral from Morris, this did not breach the key rule that any such loan could be made only when all other personal collateral had been exhausted. Barclays has said that the crucial email does not relate to Diamond Shape and had no relevance to the SFLG application.

Referring to the email, the report says: “The extent to which he was being asked to support the borrowing … personally does not, in itself, invalidate the making of an SFLG loan.” The department could not explain how this apparent retrospective rewriting of the scheme’s rules was justified. A department spokesperson said: “The department is satisfied that all relevant and necessary evidence from the loan application process, from all parties, has been properly considered.”

Barclays said: “Barclays co-operated fully with the Department of Business Innovation and Skills and RSM Tenon during their thorough audit of the loan made to Diamond Shape Limited by Barclays in 2006. Weare pleased to acknowledge the findings of the final report which found that ‘the loan and business appear to meet the eligibility criteria of the scheme at the time’. Barclays remains committed to lending and will utilise government schemes, where appropriate, to help make funds available to our customers and clients.”

RSM Tenon declined to comment.

Barclays and HBOS: two banks, two different fates

Category : Business

Separate reports into the crises at two of Britain’s largest lenders revealed a common cause of their problems, but widely varying careers in the aftermath of the crash

In the early hours of 15 September 2008, as the US bank Lehman Brothers was collapsing, many feared the worst, and they were proved correct: markets crumbled and, in the coming days and weeks, so did some 30 banks around the world. But few would have guessed that, five years on, the fallout from that crisis would still be front-page news.

Last week, two reports into two banks that fared very differently after the crisis – Barclays and HBOS – were published, shedding light once more on a furious fight for survival in the dark days of 2008. Barclays succeeded and HBOS failed spectacularly.

What both banks had in common was that their problems were rooted in the phenomenal race for growth during the go-go years of the early 2000s. The traditional caution of bankers was thrown aside and a dash for expansion, fuelled by lending and financial engineering, took hold. Barclays moved into tax avoidance – its structured capital markets division generated more than £1bn in revenue in the four years to 2010 – and failed to stop its traders rigging the Libor interest rate, which eventually resulted in a £290m fine.

The two reports could not be more different. The 244 pages detailing the cultural crisis inside Barclays were commissioned by the bank itself, as a demonstration of its determination to clean up its act. It employed a lawyer – City grandee Anthony Salz, a director of the Scott Trust, which owns the Observer – to investigate how and why standards had hit rock bottom. Salz interviewed 600 individuals in nine months, although none is quoted even anonymously in the analysis.

On its way to making 34 recommendations, the report concludes that the bank overpaid its staff, chased an ambition to become a top five player at all cost and failed to make its 140,000 staff understand they worked for the same organisation. Barclays’ new chairman, Sir David Walker, who is writing a cheque for £17m to cover the costs of the review, described its contents as “uncomfortable reading at times”.

In contrast, the 96 pages on HBOS produced by the parliamentary commission on banking standards, whose members include MPs and peers and the new archbishop of Canterbury, was an excoriating attack on the incompetence of the three men at the bank’s helm. It pulled no punches and called for City regulators to conduct an investigation into whether the three – long-standing chairman Lord Stevenson, and chief executives Sir James Crosby and Andy Hornby – should be banned from the City for life. None has commented on the scathing attack on their “toxic” mistakes. Just how much the HBOS report has cost the taxpayer is unclear, but it will be a fraction of the Barclays bill.

HBOS did not survive the Lehman fallout: within three days it had been rescued by Lloyds TSB. A month later, it was bailed out with £20bn of taxpayers’ cash. Barclays did scrape through, but only by going cap in hand to Middle Eastern investors; the circumstances of that venture are now being investigated by the Serious Fraud Office. Salz describes this desperate battle to avoid a bailout as making Barclays look “too clever by half”, damaging its relationship with overstretched regulators and its own investors.

While HBOS was being rescued, Barclays was still chasing growth, snapping up the Wall Street operations of the collapsed Lehman Brothers – a move that Salz said added to the management challenges facing a bank that was already stretched.

Stories had circulated for years about splits inside Barclays. The high street tellers felt no link to Bob Diamond’s casino operations, which the report said had a win-at-all-costs attitude that came to dominate the organisation. Diamond’s chief operating officer, Paul Idzik, was infamous for his behaviour, which included cutting off people’s ties and snapping pens that did not bear the company logo.

But the Salz report shows the retail bank was not blameless either. Salz details a culture of fear that pervaded the division when it was run by the Dutchman Frits Seegers, who left suddenly in 2009. Sales targets were tough, and staff incentivised to push loans with profitable payment protection insurance (PPI) attached.

Diamond and Seegers were put in charge of the two big businesses inside Barclays by the then chief executive John Varley, who failed to prevent them running the two divisions as separate silos. Salz said that while this was not Varley’s intention, he had failed to create a “cohesive” top team.

Barclays’s new boss, Antony Jenkins, who is trying to reinvent the bank, is not entirely spared criticism either. It is not levelled directly at him, but Jenkins ran the Barclaycard operation that sold millions of pounds of useless PPI to cardholders.

At HBOS, there was no hope of surviving the Lehman fallout. In fact, the parliamentary report makes it clear that it would have gone bust even if there had been no financial crisis because of the £47bn of losses racked up in just three of its divisions.

Only one person – Peter Cummings, who ran the HBOS corporate lending arm – has so far faced any official sanction. At Barclays, the SFO continues to investigate former and current executives. But at HBOS, the chances of action seem slim. Crosby quit as an adviser to private equity group Bridgepoint after the report was published and is under pressure to relinquish his seat on the board at caterer Compass. Hornby has a top job at bookmaker Coral and Stevenson continues to hold directorships at the Tate and Glyndebourne. A three-year rule makes it difficult for City regulators to take any action against the trio.

In addition, the Financial Services Authority closed its enforcement investigation last year when Cummings was fined – even though it is yet to publish its own report into the catastrophe.

Barclays independent review: bankers tried to ‘win at all costs’

Category : Business

Anthony Salz’s 244-page report – commissioned after Libor scandal – finds pay ‘contributed significantly to a sense among a few that they were somehow unaffected by the rules’

Barclays bankers were engulfed in a culture of “edginess” and had a “winning at all costs” attitude which raised tensions with regulators and damaged its reputation, according to a review into the ethics of the embattled bank.

In a 244-page report (pdf), which cost £17m and was compiled after interviews with 600 individuals in the wake of the Libor-rigging scandal, City lawyer-turned-banker Anthony Salz calls on Barclays to strengthen its board, co-operate more closely with City watchdogs and link its pay to the bank’s “long-term success”.

Salz, who makes 34 recommendations, provides an insight into the pay of a cabal of the top 70 Barclays executives who received up to 35% more than peers at rivals, while 60 investment bankers benefited from a lucrative long-term bonus scheme that paid out £170m a year between 2002 and 2009.

“Based on our interviews, we could not avoid concluding that pay contributed significantly to a sense among a few that they were somehow unaffected by the rules,” the report says. “A few investment bankers seemed to lose a sense of proportion and humility.”

The review says the bank underestimated the reputational hit it took from its tax schemes. Data shows its controversial structured capital markets (SCM) arm made £1bn of revenue a year between 2007 and 2010. The division, which is being shut down with its 100 staff being redeployed around the bank, generated revenues of £9.5m in the 11 years to 2011.

The review also reveals that Barclays paid just £82m in corporation tax to the exchequer in 2012 after top-line profits of £7bn shrank to £246m.

Salz found the most deep-rooted culture was inside the investment bank, which was focused on success. “Winning at all costs comes at a price: collateral issues of rivalry, arrogance, selfishness and a lack of humility and generosity,” he writes.

The report – which puts a focus on the management of former chief executive John Varley – reveals that 728 Barclays bankers received more than £1m in 2010. That number fell to 428 in 2012.

The review, which does not attempt to blame any individuals for the damaging collapse in the bank’s reputation, highlights the 10 years of rapid growth that took place as Barclays rose to become a top-five global bank under Varley.

Varley, who handed the top job to Bob Diamond in January 2011, had an executive committee of six colleagues which did “not develop a cohesive team at the top”, putting Diamond in charge of the investment bank and Frits Seegers – who left in 2009 – in charge of the retail bank where he instilled a “culture of fear”.

Diamond, who quit in July 2012 just days after the bank was fined £290m for rigging Libor, had taken steps to develop one culture across the bank, says Salz, who is a director of the Scott Trust, owner of the Guardian. Rothschild, where Salz is also a director, received £1.5m in fees for his time.

Salz says: “Significant failings developed in the organisation as it grew. The absence of a common purpose or common set of values has led to conduct problems, reputational damage and a loss of public trust.”

He admitted that some Barclays staff had refused to be interviewed for the review and one City analyst described the report as an “inappropriate use of trees”, alluding to its focus on the bank’s past instead of its future challenges.

Divisions previously run by Diamond’s successor and current chief executive, Antony Jenkins, are also mentioned. Barclaycard had a culture of making money ahead of customer satisfaction. The retail bank focused on sales where loans sold with payment protection insurance generated two-and-a-half times more commission for staff than loans sold without the discredited insurance, which generated £400m in revenue a year for the bank.

Jenkins has announced a new set of values and a programme of reform, although a survey of 9,000 staff by Salz found that 70% had a high degrees of scepticism about the changes.

The review says the bank came across as “too clever by half” and that its battle to avoid a taxpayer bailout damaged its reputation. “Barclays was sometimes perceived as being within the letter of the law but not within its spirit,” the review says, describing “an institutional cleverness”.

The complicated Protium transaction it used to move loans off its balance sheet in 2009 had concerned regulators while Barclays could have communicated its 2008 fundraisings from Middle Eastern investors – now under investigation by the Serious Fraud Office – more clearly, according to the report. During crucial stress tests to assess its financial health, the bank was “insufficiently sensitive” about the way it presented the results.

Sir David Walker, appointed chairman of Barclays in the wake of the Libor fine, said: “The report makes for uncomfortable reading in parts”.

Barclays report blames bank culture

Category : Business

Barclays became too focused on short-term profit and bonuses in the run-up to the Libor-rigging scandal, a review commissioned by the bank says.

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