| Type | Public limited company |
|---|---|
| Traded as | LSE: BARC NYSE: BCS |
| Industry | Banking Financial services |
| Founded | 1690 |
| Headquarters | One Churchill Place, Canary Wharf, London, United Kingdom |
| Area served | Worldwide |
| Key people | Marcus Agius (Group Chairman) Robert Diamond (Group Chief Executive) |
| Products | Retail banking Commercial banking Investment banking Investment management Private Equity |
| Revenue | £31.440 billion (2010)[1] |
| Operating income | £6.065 billion (2010)[1] |
| Net income | £6.1 billion (2011)[1] |
| Employees | Approximately 145,000 (2011)[2] |
| Subsidiaries | Barclays Bank PLC |
| Website | Barclays.com |
Barclays PLC (LSE: BARC, NYSE: BCS) is a global banking and financial services company headquartered in London, United Kingdom. As of 2010 it was the world's 10th-largest banking and financial services group and 21st-largest company according to a composite measure by Forbes magazine.[3] It has operations in over 50 countries and territories across Africa, Asia, Europe, North America and South America and around 48 million customers.[4] As of 30 June 2010 it had total assets of €1.94 trillion, the third-largest of any bank worldwide (after BNP Paribas and HSBC).[5]
Barclays is a universal bank and is organised within two business 'clusters': Corporate & Investment Banking and Wealth Management, and Global Retail Banking.[6] The Corporate & Investment Banking and Wealth Management cluster comprises three business units: Barclays Capital (investment banking), Barclays Corporate (commercial banking) and Barclays Wealth (wealth management).[6] The Global Retail Banking cluster comprises four business units: Barclaycard (credit card and loan provision), Barclays Africa, UK Retail Banking and Western Europe Retail Banking.[6]
Barclays' primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £21.8 billion as of 23 December 2011, making it the 22nd-largest company on the London Stock Exchange.[7] Barclays has a secondary listing on the New York Stock Exchange.
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This bank traces its origins back to 1690 when John Freame and Thomas Gould started trading as goldsmith bankers in Lombard Street, London. The name "Barclays" became associated with the business in 1736, when James Barclay, son-in-law of John Freame, one of the founders, became a partner in the business.[8] In 1728, the bank moved to 54 Lombard Street, which was identified by the 'Sign of the Black Spread Eagle', over the years becoming a core part of the bank's identity.[9]
In 1776 the firm was styled "Barclay, Bevan and Bening" and so remained until 1785, when another partner, John Tritton, who had married a Barclay, was admitted, and the business then became "Barclay, Bevan, Barclay and Tritton".[10]
In 1896 several banks in London and the English provinces, notably Backhouse's Bank of Darlington and Gurney's Bank of Norwich, united under the banner of Barclays and Co., a joint-stock bank. Between 1905 and 1916 Barclays extended its branch network by making acquisitions of small English banks.
Further expansion followed in 1918 when Barclays amalgamated with the London, Provincial and South Western Bank and in 1919 when the British Linen Bank was acquired by Barclays Bank, although the British Linen Bank retained a separate board of directors and continued to issue its own bank notes (see Banknotes of the pound sterling). Then in 1924 the planned takeover of National Bank of Kingston reached near-completion but was halted three days before finalisation.
In 1965, Barclays established a US affiliate, Barclays Bank of California in San Francisco.
Barclaycard, the first credit card in the UK, was launched in 1966 and in 1967, Barclays unveiled the world's first ATM cash machine at Enfield, north London. British actor Reg Varney was the first one to use the ATM.
In 1969, the planned merger with Martins Bank and Lloyds Bank was blocked by the Mergers and Monopolies Commission but the acquisition of Martins Bank on its own was allowed. Also that year the British Linen Bank subsidiary was sold to the Bank of Scotland in exchange for a 25% stake, a transaction that became effective from March 1971.
In 1974, following the secondary banking crash, Barclays purchased Mercantile Credit Company.
In 1980, Barclays Bank International expanded its business to include commercial credit and took over American Credit Corporation, renaming it BarclaysAmerican.[11]
Barclays became the first bank to re-open branches on Saturday mornings in 1982, twenty years after the practice ended. Two years later, in 1984, Barclays posted record profits.
The following year Barclays Bank and Barclays Bank International merged: as part of the corporate reorganisation, the former Barclays Bank PLC became a group holding company, renamed as Barclays PLC and UK retail banking was integrated under the former BBI, and renamed Barclays Bank PLC.
In 1985, Barclays introduced Connect, the first debit card in the United Kingdom. The Connect brand is still being used on their debit cards today.
In 1986 Barclays sold its South African business operating under the Barclays National Bank name after protests against Barclays' involvement in South Africa and its apartheid government. Also that year Barclays bought de Zoete & Bevan and Wedd Durlacher to form BZW and to take advantage of the Big Bang on the London Stock Exchange.
In 1988, Barclays sold Barclays Bank of California to Wells Fargo Bank, N.A.
Edgar Pearce, the "Mardi Gras Bomber", began a terror campaign against the bank and the supermarket chain Sainsbury's in 1994.[12]
In 1996, Barclays bought Wells Fargo Nikko Investment Advisors (WFNIA) and merged it with BZW Investment Management to form Barclays Global Investors.[13]
Two years later, in 1998, the BZW business was broken up and parts were sold to Credit Suisse First Boston: Barclays retained the debt business which formed the foundation of what is now Barclays Capital.[14]
In 1999, in an unusual move as part of the trend at the time for free ISPs, Barclays launched an internet service called Barclays.net: this entity was acquired by British Telecom in 2001.[15]
The year 2000 saw the acquisition of Woolwich plc (formerly the Woolwich Building Society).[16]
In 2001 Barclays closed 171 branches in the UK, many of them in rural communities: Barclays called itself "THE BIG BANK" but this name was quickly given a low profile after a series of embarrassing PR stunts.[17]
In 2003, Barclays bought the American credit card company Juniper Bank from CIBC, re-branding it as "Barclays Bank Delaware".[18] The same year saw the acquisition of Banco Zaragozano, the 11th Spanish bank.[19]
Barclays took over sponsorship of the Premier League from Barclaycard in 2004.[20] In May 2005 Barclays moved its group headquarters from Lombard Street in the City of London to One Churchill Place in Canary Wharf. Also in 2005 Barclays sealed a £2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July 2005.[21]
Then in 2006, Barclays purchased the HomEq Servicing Corporation for $469 million in cash from Wachovia Corp.[22] That year also saw the acquisition of the financial website Comparetheloan[23] and Barclays announcing plans to rebrand Woolwich branches as Barclays, migrating Woolwich customers onto Barclays accounts and migrating back-office processes onto Barclays systems – the Woolwich brand was to be used for Barclays mortgages.[24]
In January 2007, Barclays announced that it has purchased the naming rights to the Barclays Center, a proposed 18,000-seat arena in Brooklyn, New York, where the New Jersey Nets planned to relocate.[25] Barclays cancelled its secondary listing on the Tokyo Stock Exchange in 2008.
In March 2007, Barclays announced plans to merge with ABN AMRO, the largest bank in the Netherlands.[26][27] However, on 5 October 2007 Barclays announced that it had abandoned its bid,[28] citing inadequate support by ABN shareholders. Fewer than 80% of shares had been tendered to Barclay's cash-and-shares offer.[29] This left the consortium led by Royal Bank of Scotland free to proceed with its $99.9 cents counter-bid for ABN AMRO.
To help finance its bid for ABN AMRO, Barclays sold a 3.1% stake to China Development Bank and a 3% stake to Temasek Holdings, the investment arm of the Singaporean government.[30]
Also in 2007, Barclays agreed to purchase Equifirst Corporation from Regions Financial Corporation for $225 million.[31] That year also saw Barclays Personal Investment Management announcing the closure of their operation in Peterborough and its re-siting to Glasgow, laying off nearly 900 members of staff.[32]
On 30 August 2007, Barclays was forced to borrow £1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading.[33] Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerised settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity."[34]
On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a £4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours.[35] Subsequent write-downs at the bank were announced to be £1 billion ($1.9 billion), much less than feared.
In July 2008, Barclays attempted to raise £4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank.[36]
In 2008, Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables.[37] Barclays also bought a controlling stake in the Russian retail bank Expobank for $745 million.[38] Later in the year Barclays commenced its Pakistan operations with initial funding of $100 million.[39]
On 16 September 2008, Barclays announced its agreement to purchase, subject to regulatory approval, the investment-banking and trading divisions of Lehman Brothers, a United States financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquired the New York headquarters building of Lehman Brothers.
On 20 September 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays plc to acquire the core business of Lehman Brothers (mainly Lehman's $960 million Midtown Manhattan office skyscraper, with responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency."[40]
Luc Despins, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million." Further, Barclays will not acquire Lehman's Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high net-worth individuals. Finally, Lehman will retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays.[41] Barclays had a potential liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days.[42][43]
Reuters later reported that the British government would inject £40 billion ($69 billion) into three banks including Barclays, which might seek over £7 billion.[44] Barclays later confirmed that it rejected the Government’s offer and would instead raise £6.5 billion of new capital (£2 billion by cancellation of dividend and £4.5 billion from private investors).[45]
In January 2009, the press reported that further capital may be required and that while the government might be willing to fund this, it may be unable to do so because the previous capital investment from the Qatari state was subject to a proviso that no third party might put in further money without the Qataris receiving compensation at the value the shares had commanded in October 2008.[46] In March 2009, it was reported that in 2008, Barclays received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States to bail out AIG.[47][48]
On 12 June 2009, Barclays sold its Global Investors unit, which includes its exchange traded fund business, iShares, to BlackRock for $13.5bn.[49] Standard Life sold Standard Life Bank plc to Barclays plc in October 2009. The sale was completed on 1 January 2010.[50] On 11 November 2009, Barclays and First Data, a global technology provider of information commerce, have entered into an agreement according to which Barclays will migrate a range of card portfolios to First Data's issuing and consumer finance platform.[51] On 13 February 2010, Barclays announced it would pay more than £2 billion in bonuses.[52] In March 2011 it was reported that Barclays had overtaken Banco Santander to claim top spot as the UK's most complained against bank, with the country's official banking regulator, the Financial Services Authority having recorded 276,315 new customer complaints against Barclays Bank during the second half of 2010.[53] Barclays nevertheless ranks only third in the UK among the mainstream clearing banks in terms of the number of its branches.
Inline with cut costs, Barclay has cut 1,400 jobs during the first half of 2011 and will cut another 1,600 jobs for the rest of 2011. Barclay has around 145,000 workforces.[54]
In September 2011 Chief Executive officer Robert Diamond said that the bank is back on track to meet its target of achieving 13 percent return of equity by 2013.
Barclays is headed by Marcus Agius, the Group Chairman, who joined the Board on 1 September 2006 and succeeded Matthew Barrett as Chairman from 1 January 2007. Agius is also the senior executive Director of the BBC and was formerly Chairman of BAA PLC, Chairman of Lazard in London and a Deputy Chairman of Lazard LLC until 31 December 2006.
Reporting directly to the Group Chairman is Robert Diamond, the Group Chief Executive, who is responsible for the strategic direction and planning of all Barclays operations. John Silvester Varley was appointed to the role in September 2004 prior to which he served as Deputy Chief Executive (January–September 2004) and Group Finance Director (2000–2003).
In November 2009, John Varley realigned Barclays' businesses into Global Retail Banking and Corporate and Investment Banking and Wealth Management. Global Retail Banking comprises UK Retail Banking, Barclaycard, the retail operations in Western Europe and Emerging Markets businesses, and retail operations and technology. Corporate and Investment Banking and Wealth Management comprises Barclays Capital, Barclays Commercial Bank and Barclays Wealth. This resulted in certain changes to the leadership team and an expansion of the Group Executive Committee (ExCo).
The ExCo, as of June 2011, consists of:
[1] reporting to Robert Diamond.
[2] reporting to Chris Lucas.
[3] responsible for HR, Strategy, Corporate Affairs, Brand & Marketing and reporting to Robert E. Diamond, Jr.
The company has no COO or CIO. Paul Idzik, the former COO, completed an organisational redesign that saw IT functions devolved to the core business divisions – Global Retail & Commercial Banking and Investment Banking – and, following completion Idzik resigned from his post.
The Board Members are:[59]
Barclays has over 1800 UK high street branches (including former Woolwich branches) and it has also joined up with the Post Office Ltd to provide personal banking services to customers who live near a Post Office branch and those who need financial services such as secured or unsecured loans.
Worldwide, Barclays has over 4,750 branches in over 50 countries.[60]
Most Barclays branches have 24/7 cash machines. Barclays' customers and customers of many other banks can use Barclays ATMs for free in the UK, however, in other parts of the world there maybe small fees charged, for instance in Ghana Barclays charge gh¢0.25 per withdrawal from their ATMs and gh¢1.00 when the card is used on other bank's ATMS
Barclays Capital is a strong investment arm owned by Barclays Bank PLC. Barclays Capital had created an investment funds business that handles billions of pounds daily, iShares. After much debate, Barclays president Bob Diamond, along with other Barclays bosses chose to sell the iShares business to further boost capital. The preliminary price for the business is £3billion, although Barclays has the flexibility to sell at a higher price, should a bidder show interest before the selling deadline.
Barclays Corporate, another subsidiary of the Barclay's group provides banking solutions to organisations with an annual turnover of more than £5 million. These solutions include Deposits and Liquidity, Cash Management and Trade, Financing, Foreign Exchange, Risk Management and Online Banking.[61] It serves over 8000 companies spread across 23 countries worldwide.[61]
Barclays is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no ATM access fees when traveling internationally.[62] Other participating banks are Bank of America (United States), BNP Paribas (France), UkrSibbank (Ukraine), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada) and Westpac (Australia and New Zealand).
Barclays has sponsored the Premier League since 2001 (from 2001 to 2004 under the Barclaycard brand) and, from 2006, the Churchill Cup. Barclays also sponsored The Football League from 1987 until 1993, succeeding Today newspaper and being replaced by Endsleigh Insurance. It also sponsored the 2008 Dubai Tennis Championships.[63] In 2009 it became the official sponsor of the ATP World Tour Finals.
Barclays is a major sponsor of professional golf tournaments worldwide, the Barclays Scottish Open on the PGA European Tour at Loch Lomond since 2002, the Barclays Classic on the PGA Tour from 2005–2006, which became The Barclays in 2007, the first of four playoff tournaments for the FedEx Cup, and since 2006 Barclays has been title sponsor to the Singapore Open, the richest national open in Asia, and since 2009 has been co-sanctioned with the European Tour. Barclays also sponsors PGA Tour star Phil Mickelson and European Tour player Darren Clarke.
Barclays bank was known overseas in the financial industry in the 1980s as 'Boerclaysbank', due to its continued involvement in South Africa during the apartheid regime.[64] A student boycott of the bank led to a drop in its share of the UK student market from 27 per cent to 15 per cent by the time it pulled out in 1986.[65]
In 2006, a South African activist group, the Jubilee South Africa backed Khulumani Support Group, sought reparations from Barclays in addition to Citigroup, BP, Royal Dutch Shell, Ford, GM, and Deutsche Bank for their roles indirectly supporting the apartheid government in South Africa during the 1970s and 1980s. The legal proceedings are being heard at the Second Circuit Court of Appeals in New York, and the South African Ministry of Justice is seeking dismissal of the case on the grounds that it undermines its national sovereignty.[66]
Barclays helps to fund President Robert Mugabe's government in Zimbabwe.[67] The most controversial of a set of loans provided by Barclays is the £30m it gives to help sustain land reforms that saw Mugabe seize white-owned farmland and drive more than 100,000 black workers from their homes. Opponents have called the bank's involvement a 'disgrace' and an 'insult' to the millions who have suffered human rights abuses.[68] Barclays spokesmen say the bank has had customers in Zimbabwe for decades and abandoning them now would make matters worse, 'We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment".[69]
Barclays also provides two of Mugabe’s associates with bank accounts, ignoring European Union sanctions on Zimbabwe.[70] The men are Elliot Manyika and minister of public service Nicholas Goche. Barclays has defended its position by insisting that the EU rules do not apply to its 67%-owned Zimbabwean subsidiary because it was incorporated outside the EU.[71]
In March 2009, Barclays was accused of violating international anti-money laundering laws. According to the NGO Global Witness, the Paris branch of Barclays held the account of Equatorial Guinean President Teodoro Obiang's son, Teodorin Obiang, even after evidence that Obiang had siphoned oil revenues from government funds emerged in 2004. According to Global Witness, Obiang purchased a Ferrari and maintains a mansion in Malibu with the funds from this account.[72]
A 2010 report by the Wall Street Journal described how Credit Suisse, Barclays, Lloyds Banking Group, and other banks were involved in helping the Alavi Foundation, Bank Melli, the Iranian government, and/or others circumvent US laws banning financial transactions with certain states. They did this by 'stripping' information out of wire transfers, thereby concealing the source of funds. Barclays settled with the government for $298,000,000.[73]
Robert Diamond, the US-born head of Barclays Capital, was set to receive a £14.8m bonus in 2008, as Barclays Capital made a profit of £2.3bn in the year, despite the subprime mortgage crisis in the US forcing the division to take a £1.6bn hit in 2007.[74]
On December 10, 2011 Barclays Chief Executive Bob Diamond said he had imposed a "no jerks" rule for the U.K. bank. In an interview with The Times newspaper, Diamond says the rule applies to bankers considered to be prima donnas, too greedy, bankers who "can't behave with their colleagues", too ostentatious or failures as team players. Diamond was quote as saying that between 30 and 40 Barclays employees have been encouraged to find other jobs for violating the standard.[75][76]
In March 2009, Barclays obtained an injunction against The Guardian to remove from its website confidential leaked documents describing how SCM, Barclays' structured capital markets division, planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via "an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries".[77] In an editorial on the issue, the Guardian pointed out that, due to the mismatch of resources, tax-collectors (HMRC) have now to rely on websites such as WikiLeaks to obtain such documents,[78] and indeed the documents in question have now appeared on WikiLeaks.[79][80] Separately, another Barclays whistleblower revealed several days later that the SCM transactions had produced between £900m and £1bn in tax avoidance in one year, adding that "The deals start with tax and then commercial purpose is added to them."[81]
In December 2008, the British anti-poverty charity War on Want released a report documenting the extent to which Barclays and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that Barclays is the world's largest arms investor, holding £7.3 billion in shares in the arms manufacturers. The report also details Barclays' dealings with known producers of cluster munitions and depleted uranium.[82]
Barclays' investment banking division, Barclays Capital, is one of the world's largest speculator on food commodities, along with Goldman Sachs and Morgan Stanley. A report by World Development Movement published in April 2011, shows that Barclays makes up to £340 million a year from speculating on food, making it the largest food speculator in the UK.[83]
In a 2011 Delaware Chancery Court decision, Barclays was criticized for failing to disclose conflicts of interest to its client, Del Monte, in connection with Del Monte's buyout, which was led by KKR.[84] Barclays subsequently agreed to pay $24 million and give up a $22 million fee from Del Monte, as part of a settlement of a lawsuit brought on behalf of Del Monte shareholders. [85]
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