Barclays

Barclays PLC

Barclays Logo
Company type	Public (LSE: BARC, NYSE: BCS, TYO: 8642)
Industry	Banking
Founded	1690
Headquarters	London, England, UK
Area served	Worldwide
Key people	Marcus Agius (Chairman) John S. Varley (Group Chief Executive) & (Executive Director) Robert Diamond (President)
Products	Commercial banking Investment banking Investment management
Revenue	£ 23,000 Million(2007)
Operating income	£ 7,048 Million(2007)
Net income	£ 5,095 Million (2007)
Total assets	£ 1.227 Trillion (2007)
Total equity	£ 23.291 Billion (2007)
Number of employees	147,000 (2008)
Website	Barclays.com

The Barclays Group is based in One Churchill Place, Canary Wharf.

Barclays PLC is a major global financial services provider operating in Europe, North America, the Middle East, Latin America, Australia, Asia and Africa. It is a holding company that is listed in London, New York and Tokyo. It operates through its subsidiary Barclays Bank PLC.

Barclays PLC is ranked as the 25th largest company in the world according to Forbes Global 2000 (2008 list) and the fourth largest financial services provider in the world according to Tier 1 capital ($32.5 billion). It is the third largest bank in the United Kingdom based on market capitalisation.

The bank's headquarters are at One Churchill Place in Canary Wharf, in London's Docklands, having moved there in May 2005 from Lombard Street in the City of London.

History

This bank traces its roots back to 1690 in London. The name "Barclays" became associated with the business in 1736, when James Barclay, son-in-law of one of the founders, became a partner in the business. 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.

Timeline

• 1896 — Several banks in London and the English provinces, notably Backhouse's Bank of Darlington and Gurney's Bank of Norwich, unite under the banner of Barclays and Co., a joint-stock bank
• 1905–1916 — Acquisitions of small English banks extends the branch network
• 1918 — Barclays amalgamates with the London, Provincial and South Western Bank
• 1919 — The British Linen Bank was acquired by Barclays Bank though it retained a separate board of directors and continued to issue its own bank notes.
• 1924 — Planned takeover of National Bank of Kingston reaches near-completion but halted three days before finalisation
• 1965 — Barclays establishes a US affiliate, Barclays Bank of California in San Francisco.
• 1966 — Barclaycard launched, the first credit card in the UK
• 1967 — Barclays unveils the first ATM cash machine at Enfield, north London.
• 1969 — Planned merger with Martins Bank and Lloyds Bank; forbidden by the Mergers and Monopolies Commission
• 1969 — Acquisition of Martins Bank allowed
• 1969 — The British Linen Bank subsidiary sold to the Bank of Scotland in exchange for a 25% stake (effective from March 1971).
• 1984 — record profits posted
• 1985 — Barclays Bank and Barclays Bank International merge. As part of the corporate reorganisation, the former Barclays Bank PLC becomes a group holding company, renamed as Barclays PLC. UK retail banking is integrated under the former BBI, and renamed Barclays Bank PLC.
• 1986 — Barclays sells its South African operations under the Barclays National Bank name after protests against Barclays' involvement in South Africa and its apartheid government.
• 1986 — Buys de Zoete & Bevan and Wedd Durlacher to form BZW, to take advantage of Big Bang on the London Stock Exchange
• 1988 — Barclays sells Barclays Bank of California to Wells Fargo Bank, N.A.
• 1994 — Edgar Pearce, the "Mardi Gras Bomber", begins a terror campaign against the bank and the supermarket chain Sainsbury's
• 1996 — Buys Wells Fargo Nikko Investment Advisors (WFNIA) and merges it with BZW Investment Management to form Barclays Global Investors
• 1998 — BZW business is broken up and parts sold to Credit Suisse First Boston. Retains debt business which forms the foundation of what is now Barclays Capital.
• 1999 — In an unusual move as part of the trend at the time for free ISPs, Barclays launches an internet service called Barclays.net. This entity is acquired by British Telecom in 2001.
• 2000 — Acquisition of Woolwich plc (formerly the Woolwich Building Society)
• 2001 — Barclays closes 171 branches in the UK, many of them in rural communities. Calls itself "THE BIG BANK" but this is quickly given a low profile after a series of embarrassing PR stunts.
• 2003 — Barclays buys American credit card company Juniper Bank from CIBC, re-branding it as "Barclays Bank Delaware". Acquisition of Banco Zaragozano, the 11th Spanish bank.
• 2004 — Barclays takes over the Premier League as a sponsor from Barclaycard
• 2005 — Barclays seals £2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July
• 2006 — Barclays purchases HomEq servicing corporation for $469 million in cash from Wachovia Corp.
• 2006 — Acquisition of the financial website Comparetheloan
• 2006 — Barclays announces plans to rebrand Woolwich branches as Barclays, migrating Woolwich customers onto Barclays accounts and migrating back-office processes onto Barclays systems. The Woolwich brand will be used for Barclays mortgages.
• 2007 — Barclays announces 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 plan to relocate.
• 2007 — Barclays announces a merger with (effectively a takeover of) the Dutch bank ABN AMRO. This prompts a separate bid for the Dutch bank from a consortium led by the RBS Group and comprising of the Belgian bank Fortis and the Spanish bank Santander, under the name RFS (Royal/Fortis/Santander}.
• 2007 — Barclays agrees to purchase Equifirst Corporation from Regions Financial Corporation for $225 million.
• 2007 — Barclays withdraws the bid for ABN AMRO allowing the Royal Bank of Scotland led consortium to succeed with their offer.
• 2007 — Barclays Personal Investment Management announce the closure of their International office in Peterborough and its re-siting to Glasgow, laying off nearly 900 members of staff.
• 2008 — Barclays buys the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables
• 2008 — Barclays buys a controlling stake in Russian retail bank Expobank for $745 million
• 2008 — Barclays commences its Pakistan operations with $100 million
• 2008 — Barclays buys Lehman Brothers North American investment banking assets totalling $1.3 billion

Constituents of the Barclays Group

• Barclays Bank PLC
• Mercers Debt Collection Agency
• Barclays Bank Delaware (formerly Barclaycard US, originally Juniper Bank, acquired 2003)
• Barclays Retail Bank — UK clearing bank
• Barclays Commercial Bank — Dealing with medium and larger corporate UK business.UK banks
• Barclays Wealth — Stockbrokers, Offshore and Private bank
• Barclays Private Clients International Ltd. — subsidiary based in the Isle of Man with branches in the Channel Islands
• Barclays Private Equity
• Barclaycard — Global credit card business
• Barclaycard US — Separate from the Barclaycard global operation, this is the corporation's US credit card operation (formerly known as "Juniper Bank"). Issues branded credit cards such as US Airways, Midwest Airlines, Frontier Airlines MasterCard, Airtran Airways Visa card, and Apple Store Visa and MasterCard accounts.
• Barclays Capital — Investment bank
• Barclays Global Investors — Investment management company
• Woolwich plc — UK mortgage brand
• Barclays Africa — To be transferred to ABSA (South Africa)
• Barclays Spain (550 branches)
• Barclays Portugal (162 branches)
• Barclays France
• Barclays Pakistan
• Absa Group Limited (South Africa)
• Firstplus Financial Group PLC
• Barclays Partner Finance (formerly Clydesdale Financial Services)

Organisational structure

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 John Varley, the Group Chief Executive, who is responsible for the strategic direction and planning of all Barclays operations. 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).

The operating units of Barclays are grouped under two umbrellas; Investment Banking and Investment Management (IB&IM) and Global Retail and Commercial Banking (GRCB). IB&IM oversees three core operating units: Barclays Capital, Barclays Global Investors (BGI) and Barclays Wealth Management.

GRCB oversees multiple operating units. Principally it has responsibility for UK Retail Banking (UKRB), Barclays Commercial Bank (formally UK Business Banking), Barclaycard and International Retail and Commercial Banking (IR&CB).

Branch of Barclays in Westminster

Board of Directors

• Marcus Agius - Chairman
• Sir Nigel Rudd - Deputy Chairman
• Sir Richard Broadbent - Senior Independent Director
• Richard Leigh Clifford - Non Executive Director
• Professor Dame Sandra Dawson - Non Executive Director
• Sir Andrew Likierman - Non Executive Director
• Stephen Russell - Non Executive Director
• Sir John Sunderland - Non Executive Director
• Dr. Danie Cronjé - Non Executive Director, Chairman of Absa

Barclays currently has no COO or CIO listed. Paul Idzik, the previous COO, left in May 2008. Barclays CIO is Bob Rickert (former employee of Key Corp) who replaced former CIO Don Trotta.

Branches

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.

Most Barclays branches have 24/7 ATMs. Barclays' customers and customers of many other banks can use Barclays ATMs free of charge.

Barclays is a member of the Global ATM Alliance.

Sponsorships

Since 2004, Barclays has sponsored the Premier League 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.

Barclays' legal situation

Currently, a South African activist group, the Jubilee South Africa backed Khulumani Support Group, is seeking 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.

Planned merger with ABN AMRO

In March 2007 Barclays announced plans to merge with ABN AMRO, the largest bank in the Netherlands. However, on 5 October 2007 Barclays announced that it had abandoned its bid, citing inadequate support by ABN shareholders. Fewer than 80% of shares had been tendered to Barclay's cash-and-shares offer. This left the consortium led by Royal Bank of Scotland free to proceed with its $99.9 billion 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.

Leo Salom, CEO for Western European markets, estimated in February 2008 that the failed takeover had cost the Barclays group "in the region of £8.67billion", but expressed a "personal opinion that the outcome was overall the best outcome for the Group".

Financial problems

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.

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."

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.

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 per cent of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank.

Controversy

Involvement with South Africa under apartheid

Barclays bank was known by many in the 1980s as 'Boerclaysbank', due to its continued involvement in South Africa during the Apartheid regime. 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.

Financial support for the Mugabe regime in Zimbabwe

Barclays helps to fund President Robert Mugabe's regime in Zimbabwe. 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 involment a 'disgrace' and an 'insult' to the millions who have suffered human rights abuses. 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".

Barclays also provides two of Mugabe’s associates with bank accounts, ignoring European Union sanctions on Zimbabwe . The men are Elliot Manyika and minister of public service Nicholas Goche. Barclay's has defended it's position by insisting that the EU rules do not apply to its 67%-owned Zimbabwean subsidiary because it was incorporated outside the EU.

Senior management bonuses

Robert Diamond, a US-born banker on the board of Barclays, was set to receive a £14.8m bonus in 2008 even though the subprime mortgage crisis in the US forced his group to take a £1.6bn hit in 2007.

Software Piracy Fraud

In 2008 the company was investigated by the Business Software Alliance for massive piracy of licensed software from companies including Adobe, Microsoft, Autodesk and several other market leaders. Barclays Capital installed software for its staff after purchase of only the initial 1 user software disc. The total amount of the fraud investigation is £3.6 Million. If a successfull prosecution and fines are issued Barclays stand to be fined over £70 Million

Lehman Brothers acquisition

On September 16, 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 acquire the New York headquarters building of Lehman Brothers.

Revised deal and judgment

On September 20, 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 Lehman's 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."

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 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. 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.

Bibliography

• Barclays Bank Limited 1926-1969: Some Recollections by A W Tuke and R J H Gillman.
• The Eagle Looks Back: A Silver Jubilee Anthology of Twenty-Five years Contributions to "The Spread Eagle" (Staff magazine which first appeared in 1926)

See also

• European Financial Services Roundtable
• PINsentry

References

• "The Forbes Global 2000". 2008 list. Retrieved 2008-04-13.
• "Top 1000 World Banks 2006". The Banker. Retrieved 2006-09-03.
• "Barclays Newsroom". Barclays plc. Retrieved 2007-01-27.

External links

• "Barclays' corporate website".
• "Profile for Barclays plc". Yahoo! Finance.