Barclays faces £50m fine from the FCA watchdog for Qatari deal

Barclays' new shares will start trading in early October

The Financial Conduct Authority (FCA) is warning Barclays Bank of a £50m fine for its 2008 investment deal with Qatari investors.

The FCA said it had "acted recklessly" and breached some rules over disclosing some aspects of the deal and had failed to "act with integrity towards holders and potential holders" of its shares.

Barclays contests the findings.

The news emerged as Barclays gave details of its plan to raise £5.95bn through the issue of new shares.

Shareholders are being offered one new share at 185p for every four they own.

The new shares are expected to begin trading on 4 October.

Probes

The FCA accused the bank of agreeing £322m in secret payments to investors to gain their support for a previous share issuance, worth just over £5bn, taken up in 2008 by Qatar Holding, part of the state-owned investment authority of Qatar.

Barclays said the fees were for giving advice.

The deal, at the height of the credit crisis, helped Barclays to avoid the need for government help which saw rivals RBS and Lloyds end up part-owned by the UK taxpayer.

As part of its share-issuing prospectus, Barclays has to disclose material facts about any potential financial risks to its business.

The prospectus outlines other investigations currently being undertaken by various bodies, including the Office of Fair Trading, the Serious Fraud Office and the US Department of Justice.

The probes cover - among other things - omissions over ownership of sub-prime assets, possible rigging of the energy market and various other possible market abuses.

Cuts

Also on Monday, Barclays Bank announced it had seen its income fall by £500m ($790m) in July and August from a year ago.

It said it "remains cautious" about the current climate.

The drop was thanks to "significantly" lower revenues in its investment banking division.

The bank said in a trading statement: "Barclays continues to remain cautious about the environment in which it operates and its focus remains on costs, capital, leverage and returns in order to drive sustainable performance improvements."

It added that the investment bank's daily performance in September had improved from July and August, but was still below levels seen in September 2012.

Barclays said its cost-cutting was proceeding according to plan and that it expected operating costs to be £18.5bn this year, excluding restructuring costs, which would meet its target.