Barclays boss forgoes bonus, Qatar deal probed

Updated 02 February 2013
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Barclays boss forgoes bonus, Qatar deal probed

LONDON: Barclays Chief Executive Antony Jenkins has opted not to take a bonus for 2012, saying he should “bear an appropriate degree of accountability” for the difficult year the British bank endured.
Jenkins is trying to restore Barclays’ reputation since the revelation of its role in a global interest rate rigging scandal led to a $450 million fine and the departure of his predecessor Bob Diamond.
Those efforts are unlikely to be a straight road. The Financial Times reported that British authorities are looking into an allegation that Barclays lent Qatar money to invest in it as part of a rescue fundraising at the height of the 2008 financial crisis.
UK rules forbid a public company from giving financial assistance in order to acquire its shares or those of a parent company.
A Barclays spokeswoman said: “Both the FSA and SFO investigations are ongoing and, as such, we are unable to comment further.”
The FSA, SFO and Qatar Holding declined to comment.
Jenkins, who became CEO in August, said he did not want to be considered for a bonus after a difficult year for the bank and its stakeholders.
“I think it only right that I bear an appropriate degree of accountability for those matters,” he said in a statement.
He said he was aware of considerable speculation about his bonus and wanted to avoid “further unnecessary public debate.” His annual salary as CEO is 1.1 million pounds and he could have received an annual bonus of up to 2.75 million.
The issue of pay at Barclays and other banks is set to flare again next week when Jenkins, Barclays Chairman David Walker and their counterparts at Lloyds and HSBC are quizzed on pay by UK lawmakers.
RBS CEO Stephen Hester said last June he would waive his bonus for 2012 following a computer systems failure which caused disruption to millions of its customers.
Qatar Holding, which according to the FT is not accused of any wrongdoing, invested 5.3 billion pounds ($ 8.4 billion) in Barclays in June and October 2008, helping it avoid a government bailout, unlike rivals Lloyds Banking Group and Royal Bank of Scotland.
The Financial Services Authority (FSA) and Serious Fraud Office (SFO) have been looking into the investment since July. Allegations of a loan to the Qataris are a new thread of the investigation, the FT said, citing two sources familiar with the situation.
The deal with Qatar was questioned from the outset. Shareholders were angry it was offered more attractive terms than existing investors. A sale of warrants in November left Qatar sitting on a gain of 1.7 billion pounds from its investment, according to Reuters estimates.
Qatar Holding, part of the Qatar Investment Authority, which was set up by the state in 2005 to diversify its investments away from oil and gas, is the bank’s biggest shareholder with a 6.7 percent stake.
Barclays said in August that Britain’s fraud prosecutors had launched a criminal probe into payments between the bank and Qatar, a month after revealing the FSA’s investigation into dealings between the two parties.
It said the FSA probe was into the bank and four current and former senior employees, including finance director Chris Lucas. Sources have said another is Roger Jenkins, the main architect of the Qatar fundraising who left Barclays in early 2009 and is now at Brazilian investment bank BTG Pactual.
Neither Lucas nor Jenkins immediately responded to requests for comment.
Barclays said in July when it first disclosed the investigation that it considered it had satisfied its disclosure obligations.


Oil prices fall on expected output rise after OPEC deal

Updated 7 min 42 sec ago
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Oil prices fall on expected output rise after OPEC deal

SINGAPORE: Brent crude oil prices fell over 1.5 percent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.
Brent crude futures, the international benchmark for oil prices, were at $74.21 per barrel at 0343 GMT, down 1.8 percent from their last close.
US West Texas Intermediate (WTI) crude futures were at $68.40 a barrel, down 0.3 percent, supported more than Brent by a slight drop in US drilling activity.
Prices initially jumped after the deal was announced late last week as it was not seen boosting supply by as much as some had expected.
OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.
Largely because of unplanned disruptions in places like Venezuela and Angola, the group’s output has been below the targeted cuts, which it now says will be reversed by supply rises especially from OPEC leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.
“Several ministers suggested that (rises) would correspond to a 0.7 million bpd increase in production,” said US bank Goldman Sachs following the announcement of the agreement, although it added that were risks “that Iran production may be even lower than we assume” and that its output could fall further due to looming US sanctions.
Still, Britain’s Barclays bank said OPEC’s and Russia’s commitments would take “the market from a -0.2 million bpd deficit in H2 2018 to a 0.2 million bpd surplus.”
Energy consultancy Wood Mackenzie said the agreement “represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies.”
In the United States, US energy companies last week cut one oil rig, the first reduction in 12 weeks, taking the total rig count to 862, Baker Hughes said on Friday.
That put the rig count on track for its smallest monthly gain since declining by two rigs in March with just three rigs added so far in June, although the overall level remains just one rig short of the March 2015 high from the previous week.