Barclays threatened with £50m fine over ‘secret payments’ in Qatar bail-out

The Financial Conduct Authority (FCA) accused it of agreeing £322m of secret payments to Middle Eastern investors to secure their support for cash calls totalling more than £5bn at the height of the financial crisis.

Barclays, which contests the FCA’s findings, said the fees relate to advisory services over five years.

It is also being probed by the Serious Fraud Office and regulators in the US, and admitted it does not know how much the final cost will be.

Barclays was warned about the potential fine on Friday and told shareholders yesterday in a prospectus document for a rights issue that will tap investors for another £5.8bn to plug a £12.8bn hole in its finances.

The FCA ruling follows its £290m penalty last year for rigging the Libor interbank lending rate.

Barclays’ prospectus also said its income in July and August fell by £500m from a year ago as revenue in its investment bank was significantly below the previous year.

The weak trading was mainly in its fixed income, currencies and commodities division and left adjusted income for the eight months to the end of August down 5 per cent on the year, the bank said.

Barclays said it could also lose $484m from a dispute in Canada related to the sale of credit default swaps.

Barclays lost a court case against Devonshire Trust, an asset-backed commercial paper trust, two years ago and in July the Court of Appeal for Ontario dismissed its appeal.

The bank said it was considering its options.

Barclays is offering shareholders one new share at 185p for every four they own. The bank expects the new shares to start trading on October 4.

“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,” the bank said in a brief trading update.