Barclays to overhaul back office operations

The Barclays headquarters building is seen in the Canary Wharf business district of London, Britain, in this February 6, 2013 file photo. (REUTERS)
Updated 05 February 2017
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Barclays to overhaul back office operations

LONDON: Barclays Plc is about to overhaul its back office operations under a restructuring to help it comply with new post-crisis rules forcing British banks to ring-fence their retail operations from their riskier business.
It has formed a new company that will operate as a standalone unit providing support services to both of its two main operations when they are formally separated — retail and investment banking, the bank said.
The ring-fencing rules seek to avoid a repeat of the 2008 crisis, when banks’ bad bets threatened depositors’ cash. While Barclays was not among those that needed a UK taxpayer-funded bailout, the new rules apply to all lenders in Britain that have retail and commercial or investment banking activities.
At Barclays, the aim is that critical support functions could continue to operate smoothly if either of its two main businesses were to run into trouble, while also keeping costs down by not having several separate back-office units, sources involved in the project said.
The overhaul — including the creation of the new company known internally as ServCo. — will affect most of the more than 10,000 people who work in Barclays back offices operations in 17 countries around the world.
It will group together the bank’s huge operations in India and South Africa that provide technology support and data management, along with functions such as compliance with regulatory requirements, corporate relations, legal affairs and human resources.
While for some staff this will simply involve a change in the name of the legal entity they work for, the sources said it was also likely to lead to some job losses.
Barclays declined to comment on the possible staff cuts or the cost of the restructuring.
However, sources with direct knowledge of the project said it would soak up much of the £1 billion ($1.25 billion) that Barclays has said it will cost to comply with the ring-fencing rules.
The structural change shows the upheaval that British banks face to meet the rules that come into force in 2019. Other British lenders are working on similar models. HSBC transferred 18,000 employees to a UK-based service company in 2015, according to a company filing, as part of a move to insulate its back-office functions to comply with the new regulations.
HSBC plans to base its ring-fenced British retail and commercial banking business in Birmingham, shifting about 1,000 staff to the central English city from London. Barclays, however, will keep both main operations headquartered at its building in the capital’s Canary Wharf district.
Paul Compton, Barclays’ chief operating officer, is overseeing the creation of the new company, which will formally be called Barclays Services Ltd.
“From the outset, we have been keen to use the incoming ring-fencing regulations to enhance the banking experience for our customers and clients, and the establishment of the service company is a great example of how we can put this into practice,” Compton told Reuters in an e-mail.


Oman oil minister excited to be part of Sri Lanka oil refinery project

Updated 24 March 2019
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Oman oil minister excited to be part of Sri Lanka oil refinery project

  • Sri Lanka originally said Oman’s oil ministry planned to take a 30 percent stake in the refinery
  • The India-based Accord Group is the main investor in the refinery project

HAMBANTOTA, Sri Lanka: Oman’s oil minister said on Sunday he was excited to be part of a Sri Lanka oil refinery project, an indication plans for the sultanate’s involvement may be back on track.
The comments by Mohammed bin Hamad Al-Rumhy came after an Omani official last week had denied the Middle Eastern country had agreed to invest in the project.
Rumhy joined Sri Lankan Prime Minister Ranil Wickremesinghe at the laying of the foundation stone for the planned $3.85 billion oil refinery at Hambantota on the south coast, which would be the island’s biggest foreign direct investment.
Sri Lanka originally said Oman’s oil ministry planned to take a 30 percent stake in the refinery, which will be built near a $1.4 billion port controlled by China Merchants Port Holdings.
The India-based Accord Group is the main investor in the refinery project, through a Singapore entity it controls.
“We have Chinese investment, we have Indian investments, we have Oman interest for investment, and we have investment interest from many other countries,” Wickremesinghe said at the event. “It shows that Hambantota will become the multinational investment zone.”
A senior Sri Lankan minister, who declined to be identified because he is not authorized to talk to the media, said Oman had given a commitment to invest in the refinery and there would not be any turning back.
But on Wednesday, Salim Al-Aufi, the undersecretary of Oman’s oil and gas ministry, said “no one on this side” was aware of the investment.
Sri Lanka’s investment board said last week that another Oman entity, Oman Trading International, was willing to supply all of the refinery’s feedstock needs and take on the marketing of the oil products it would produce.
Sri Lanka, India and China have been vying for political influence in Sri Lanka in recent years, with investment a key part of the battleground.
China is the biggest buyer of Omani oil. In January it imported about 80 percent of Oman’s crude exports, Oman government data shows.
An investment zone is planned by China Harbor Engineering Corp. alongside the port.