Barclays Has a New Boss to Deal with the Fresh Probe Started by Serious Fraud Office

Receiving Wide Coverage ...

Barclays Is Very Busy: The British bank named Antony Jenkins, its head of retail and business banking, as chief executive. The Journal says the move may represent "a shift in focus" away from investment banking as Barclays tries to revamp its image following its involvement in the London interbank offered rate scandal. Soon-to-be-board chairman David Walker told the FT "it was clear that Antony was the outstanding choice" and called his track record "highly compelling." It had to help that the British-born Jenkins is apparently nothing like his predecessor Bob Diamond, "an outspoken American investment banker" who the Times notes had been "booed and heckled by shareholders" in a meeting before the Libor scandal broke. Perhaps to drive home just how different the new and old CEOs are, Jenkins will be paid a base salary of £1.1 million. He will also be eligible for an annual bonus of £2.75 million and will receive shares in a long-term incentive program worth up to £4.4 million. Last year, the Journal reports, Diamond "received a pay award" close to £16 million.

Jenkins' statement following the appointment that he looked forward to getting started immediately may not have been the best choice of words. He becomes CEO just as Barclays finds itself faced with a fresh probe, unrelated to the Libor scandal. The Serious Fraud Office, the U.K.'s white collar crime agency, is looking into payments the bank made to Middle Eastern company Qatar Holding LLC in an effort to raise capital back in 2008. The investigation, originally begun by the Financial Services Authority, is meant to determine if Barclays adequately disclosed fees it paid to Qatar during the deal. Barclays said at the time of the FSA's original investigation it "considers that it satisfied its disclosure obligations."

Citi Settles Subprime Suit: Citigroup has agreed to pay $590 million to settle a class action lawsuit filed by shareholders who believe the bank misled them about the amount of toxic subprime debt they were holding leading up to the financial crisis. The Times does a good job of explaining the specifics of the allegations, citing that investors believed the bank failed to disclose its "huge holdings in securities known as collateralized debt obligations that were tied to mortgage securities until November 2007, when it took a multibillion-dollar write-down on them." The FT calls the settlement "one of the largest payouts of its type," but, as this American Banker article notes, while significant, the $590 million sum is "not in the top rungs of the amounts companies have paid class-action plaintiffs." Visa and MasterCard, for instance, recently proposed an over $6 billion settlement to end merchant claims concerning swipe fees.

Citi, meanwhile, doesn't want the large settlement to be seen as an admission of guilt. Instead, it says it agreed to the terms "solely to eliminate the uncertainties, burden and expense of further protracted litigation." The Journal calls the settlement the latest effort by Citi CEO Vikram Pandit to "put the pain from the financial crisis behind" the bank.

New York Times