Why Barclays prefers Abu Dhabi to GB

Why would a bank want to put out a begging bowl to the taxpayers, when it can take the same amount of money from the same people in "bank charges" ?

That will be 40 quid for reading that, thankyou.

Barclays are probably better to keep well away from borrowing from HMG and the regime that allowed us to get into this mess in the first place.
Business at the sharp end is in meltdown and each day the trade insurers are refusing debt cover insurance for some of Britains biggest names. It is difficult if not impossible to insure debts against any construction companies now and this is having another hidden impact on trade. Job cuts are still not showing on the radar but those cuts and the loss in revenue for the treasury are being under estimated. Tough times ahead, lets hope Barclays have made the right choice and we may still have one non nationalised bank in broken Britain.
More of Browns mad, spend spend policies will pour more oil on the fire.

....another pariah gets a bailout!....hoo[bloody]ray!

"At almost any cost, it wanted to avoid taking money from the Treasury - because that would have imposed restrictions on how and what it could pay senior executives"

And the greed just carries on.

Why aren't current small shareholders being offered the opportunity to buy more Barclays shares? Barclays seemed keen enough to offer them recently.

Robert, Remind us all why the State bailed the banks in the first place, instead of underwriting homeowner and business debts in the first place? Surely the first step to securing the future of the banks (and the economy), is to secure the people and businesses that invest and rely in the banks, not just the banks themselves. Consumer and Business confidence is SO very important as you have said yourself. If the banks have no customers, because they are all out of work, then banks fail more. The State may also collapse because it would have such reduced income to the Treasury leading to insufficient funds to pay all the unemployment and HOUSING benefits to all the homeless people. All we would have left would be a State with no hope. Have Messrs Brown and Darling got it right? I have my doubts..

But in effect Barclays is using its tax payer guarantees to underwrite the Abu Dhabi loan. I very much doubt the loan would be on offer without the tax payer guarantees.

Me thinks the government loan offers to these fortunate companies should come with more strings attached.

Well I can only say that those billionaires in the UAE cannot be very smart with their money.

These guys already stumped up a load of cash back a few months ago when the shares were apparently 'cheap'. Talk about throwing good money after bad.

We should be grateful, I suppose, that it is their money and not tax-payers' being lost. However I have no doubt that Brown will manage to lose our money just as effectively elsewhere.

Maybe the only good thing to come out of the forthcoming depression will be a change to the banking system. I doubt that Barclays will be finding a place in the new model.

I think the main reason Barclays is so keen to avoid HMG funding is the potential impact on its investment banking strategy. For example, RBS has been told to exit (or at least severely curtail) its investment banking operations. Barclays sees its Lehman acquisition as putting it right at the forefront of investment banking, and they don't want to be hampered in exploiting it to the full by virtue of having an unwilling shareholder in the form of HMG.

The costs of the Middle East funding looks pretty tough at present. However, the parts of Lehman's that Barclays picked up they did so very cheaply, and they were very profitable divisions. So, viewed over a 5 year timescale, and Barclays' ability to raise fresh capital in future on better terms thereby lowering their average cost of capital, opting for Middle East funding at the moment looks like a no brainer.

I'm curious to know that if the majority of the main banks are to be directed in what they do by the Treasury, does it not reduce Barclays 'independence' as irreverent? Wouldn't they have to follow what the other sheep do?

#1
Money taken from an unauthorised overdraft isn't your money in the first place.
The UK is one of the few countries in the world where it is seen as morally acceptable to assume you can take or dip into the banks money for your own personel use.
Every customer who wants such a service should ring up the bank they use to open an uuthroised overdraft and ask for the terms and conditions so they know what they will pay.

If anything it is a reflection of our borrowing to the limit for a mortgage ideals and spending large amounts on credit cards and other buy now pay later interest deals without thinking about the affordability of them that we assume we should be able to take money from an unauthroised overdraft without having to pay for it.

Although Barclays secured the middleeast fund but the future is not so rosy for barclays comparing the merged super bank of HBOS & Lloyds.

Lloyds TSB and HBOS merger will create a super strong bank and have the following benefits:

First, unlike Barclays and other UK banks 2.4trillion CDs time bomb, the so-called toxic assets of HBOS is mainly average UK hard working folks mortgage, so the default of the assets will be within target range, not the unknown quantity of CDs default;

Second, as UK, USA, European and worldwide governments poured into the money markets huge amount of literally trillions of trillions cash funds, the next few weeks will see not only credit squeeze relax but will be awashed of abundant cash funds, Libor will be tumble and as HBOS mortgage assets and business model heavily depend on money market easing, this will add further strength and huge growth potential as interest rates will come down and further stimulate housing market and the economy;

3rd, unlike HSBC or other banks exposed to overseas and developing market, any further chain reaction of these economies will cause serious problem, the merged Lloyds and HBOS super bank's main business is within UK and the macro economic wounds can be cured by effective moneytary policy, so there is not so much unknown quantity line ahead;

4th, Lloyds TSB and HBOS merger could double its existing £1bn ($1.6bn) estimate of cost savings as it integrates overlapping bank branches and IT systems.
Lloyds, which is due next week to publish its prospectus to buy HBOS and for a capital raising, could also benefit from the negative goodwill involved in buying HBOS.

Sandy Chen, an analyst at Panmure Gordon, said, at current share prices, Lloyds would be buying about £20bn of shareholder equity for less than £5bn, resulting in £15bn of negative goodwill.

Under accounting rules, this would need to be recognised immediately on the newly created bank’s income statement and allow further writedowns to be taken.

So after all the gloomy predictions, the future of merged Lloyds & HBOS suddenly become a shining bright spot under a dark clouded tunnel.

Isn'r it amazing - people moan about banks taking money from the government - and they also moan if they don't!
Its just goes tp prove - people in the UK are only happy with doom and gloom news - it must be Barclays tunr as you lot seem to have chewed up and spit out Johnathan Ross and Russell Brand!

Quite a surprisingly poor blog devoid of basic facts. 1. In case you hadnt noticed we live in an international world nowadays; 2. If you look at HSBC, Lloyds, StanChart etc shareholder base, you'll find the majority of shares owned by non-Uk institutions; 3. Barclays and StanChart have had Temasek (Singapore government) as a substantial shareholder for some time; 4. Neither Qatar or Abu Dhabi individually will own more than 50% on a fully diluted basis; 5. I know I would prefer a hands-off shareholder to HM Treasury's civil servants. It would be good for you to look at the details before resorting to sensationalism.

Is this an astonishing demonstration of greed by the two high profile bosses of BarCap & Barclays, or a shrewd move?

On face value this approach to raising finance appears to be a way of preventing HRM Government from dictating bonuses and the dividend (the latter of which is particularly welcomed by pensioned shareholders).

However, an option to sell upto 50% of the bank to the middle-eastern hands seems odd unless you consider the possibility of the UK Government going under. Under those circumstances a 50% off-shore holding linked to oil dollars isn't such a bad safety net.

I think you will find that the deal may involve Barclays moving its headquarters in Canary Wharf to Dubainext year.

Wheres there's muck there's sand as they say

Abu Dhabi and Qatar? Aren't they Muslims over there? How can they profit from usury? Which is surely what they will be doing if they profit from Barclays. Oh well.

In my view banks operating in the UK should be nationalised (by the UK government, in case you think I mean Abu Dhabi or Qatar). All others should be locked out.

They've done robbing Pension Funds now they are robbing Sovereign Wealth funds......

When will the Nationalization of Uk Housebuilders begin?

Obvious next step for Nu nuLabour!

Think of all the Council Houses that could be built !

> It can probably allow itself just a small smile of
> self-congratulation, having avoided putting out
> the begging bowl to British taxpayers.

Does it matter whether they put their begging bowl out
in one street or in some other street? They are still
beggars. And if their shareholders continue to
reward failure, then they will remain beggars.

Of course, anyone who could not pay their Mortgage could have their House nationalized.

IE their debt and equity cancelled with the Gov't taking over ownership.

They could then pay rent to HMG.

A bit like what they did to Bradford and Bingley shareholders!

Hmm, nationalizing failing Homeowners, good idea !

Barclays up nearly 10% this morning.

Re #10, I think you're right in terms of what Barclays does domestically. It will follow the pack. More accurately, it will follow Lloyds TSB/HBOS, which will be the dominant domestic player. However, the bulk of Barclays' earnings will, in future, come from investment banking. It's already a global player in bonds, and its Lehman acquisitions put it in the asme position in areas such as equities origination and distribution. Barclays in future will be more like HSBC in a way: listed in London, with a sizeable local High Street presence, but with a much larger proportion of its business away from retail banking and outside the UK.

"That Barclays can raise the money at all is a testament to its relative strength compared to the other British banks - and in the course of today it hopes to raise another £1bn to £1.5bn from other investors.

Barclays' announcement will be the last bit of relatively good news from a British bank for some time."

Robert, as business editor of the BBC have you heard of HSBC or Standard Chartered? Your reporting throughout this entire episode has been entirely one-sided, concentrating almost completely on bad news.

Well done, your parents must be proud of you.

What Barclays is doing is in the best interests of its existing shareholders - at least Barclays can continue paying dividends and running its own policies. It is the management of Lloyds TSB who should hold their heads in shame - merging with HBOS and taking the Treasury "wonga" is a gross betrayal of its existing shareholders.

One other benefit of independence from government is the ability to only make sensible loans.

The government is pressuring the nationalised banks to loan at 2007 levels - the very reckless lending that got us in this mess. I would suggest that Brown just wants to re-inflate the credit bubble long enough to call a General Election. The nationalised banks will be his vehicle to do this, but in the process will be pawns crippled by bad debt.

Given that Labour cannot run anything effectively, it is hardly surprising that Barclays want to avoid being run by Brown.

It is reported in the FT, that some of Barclay's bailout came from Lybia.

If correct, I hope that account holders will wring out the blood from the notes - the blood of PC Fletcher, Lockerbie, of the IRA victims!!!

If my acounts were with Barclays, they'd be moved rapidly!

#5. anthonygh:
"Why aren't current small shareholders being offered the opportunity to buy more Barclays shares? Barclays seemed keen enough to offer them recently."

They were! There was a rights issue some months ago where small shareholders were offered the same deal as big shareholders.

Very few of them exercised the option, so it is not really worth Barclays doing it again.

Well, it is obviously better to deal with the likes of Qatar and Dubai than with the bunch of criminals that run our country.

Shows how low we've sunk.

Back to the drawing board methinks.

So the very people who at the top of Barclays will benefit are the people who made this decision? So the CEO has decided to take this action "at any cost" to ensure he can still get a big fat bonus, along with all his friends.

And Barclays don't want to be made to lend to the "deserving" - So what, the undeserving get the money?

RP, you're making them sound morally reprehensible! Is that because they wouldn't take the chancellors coin, or becuase you genuinelly believe it?

ps. This Brand / Ross thing is ridiculous. What is really happening that the authorities want buried? I can't believe Britain is really this pathetic, so there must be something else...

Or it is this pathetic, which is worse. A nation of sheep, 30k complaining about a show they haven't heard that wasn't for them. I don't complain Wogan is boring, or the Archers is preposterous, or Songs of Praise is religious -

Max Clifford never represents the talented, innocent side of any argument. As soon as he was employed, you should know you're being played. At least she managed to avoid going on Big Brother with all the other wannabee's.

Still, at least both Brand and Ross have books out... Hmmm...

"But many jaws will drop at the disclosure that Barclays prefers what some may see as de facto nationalisation by oil-rich Middle Eastern states to nationalisation by Her Majesty's Treasury.

Maybe those whose jaws have dropped have no experience of the cesspits of inefficiency and political stupidity that were the nationalised industries controlled by the UK Treasury in the past. Or, perhaps, they are ideologically incapable of accepting that this is how it was?

"At almost any cost, it wanted to avoid taking money from the Treasury - because that would have imposed restrictions on how and what it could pay senior executives and when it could resume paying dividends to holders of its ordinary shares.

And taking British taxpayers' wonga would have made it more vulnerable to ministerial nannying that it should lend to those seen by the authorities as deserving."

So, Mr Peston, have you actually firm evidence to corroborate your picture that Barclays' actions are driven principally by the personal greed of the executives? Maybe they have the concept that Treasury oversight is guaranteed to prevent them from running the bank properly? Is the possiblity of this thought being the prime mover so remote that you feel it correct to deal with it as a jocular aside?

It absolutely staggers me that the UK government have managed to cement the myth that they are in no way responsible for having created the environment in which bad things have happened. How many journalists have the cojones to tell things as they really are, irrespective of whether this line of approach has received the official seal of approval?

Well I must confess I would much rather have to deal with a royal potentate than some oik from Whitehall with a clipboard.

The quality of the biscuits will be so much better.

There is no substitute for good breeding.

Confusing.

I thought for religious and philosophical reasons Middleeastern peoples were not allowed to charge Interest ?

There's another reason that Robert omitted to mention, why Barclays prefers not to take UK government money.

They have some lucrative lines of business relating to tax schemes that Gordon Brown does not smile upon ... and he may have had something to say about them.

I have just applied for a new Patent for a new environmentally friendly technology. Did HMG offer me any help? Not a penny.

Who is offering to develop and finance my invention to help wounded mother earth? Guess who? The Qataris.

It is not just in the area of banking that Qatar is more advanced than the UK now.

The UK has not only hamstrung its banks, it is unable to offer its own children enough reason to stay in the country.

Human capital is being squandered along with the UK taxpayer's real cash by an inept government and unelected PM.

Only speculation - but paying 14 percent interest to Qatar and Abu Dhabi is about the same (if not more) as to the UK Treasury thus I am left wondering if it has anything to do with the level of detailed scrutiny of records and procedures of the bank?

By the way - why are all of these Bank bail outs paying interest at such high rates when the Bank of England is setting about gouging UK small savers by lowering interest rates? Is this a realistic risk premium? If it is, shouldn't we be far more worried about our savings in these Banks? Time will tell.

Perhaps like the collapsing Housing market, the middleeasterners fear the collapsing Oil market.

Just wait until those Electric Cars start rolling off the Production lines!

Oil at five Dollars a barrel ?

Maybe.

Just used for Plastic.

Many people over-borrowed to fund a life-style, including their house/flat, that they could not afford. It is plain from media interviews that people often do not understand that property is not truly theirs, but belongs partly to the bank/building society, until it is fully paid for.
There is a huge resistance to accepting this. Schools will be able to do little about it: youngsters are simply not interested in the topic, seeing it as of little relevance to them.
Approvals for mortgages should be expalined clearly, at the time of taking them out. It is very risky to borrow against more than 3 (or 4?) times income.
Why should those of us who have lived within our means fund (via future tax) those who have over-borrowed? There is a hazard in borrowing money?
Why should people who did not take out mortgage insurance (saving money) be bailed out? Mortgage insurance should be compulsory.

#12 Re. your point 4 - Not if Alex Salmond has any thing to say about that "merger" !! He wants as little job losses in Scotland as possible. This means will that most of the job losses will be in *England*, primarily in Halifax !!Lloyds, being the one taking over, will *NOT* want to lose its own loyal staff !!

Lets see what Gormless Gordon has to say in the Scottish by-elections !!

#14 FYI, HSBC is a Bermuda registered bank and Standard Chartered is registered in South Africa !! Not so very "Brit" of them, are they ??

Hooray for Barclays !! At least I know my money will now be reasonably safe !!

When this fall out is over, we'll see two reasonably strong High Street banks, Barclays and HSBC, one weak "superbank", Lloyds and a bunch of weedy "banks" headed by Abbey, oops sorry, I mean Banco Santander !! RBS looks likely to be the next takeover target !!

Thats a good idea.

Instead of repossession, Nationalize the homes of those who can no longer pay their Mortgages!

Instant Council House with little upheaval.

And no compensation for loss of equity.

Afterall, like the Banks, they knew what they were doing when they took out the loan.

Why would Barclays pay over the odds for its capital - I wonder. Could it be that if it signed up for Gov funds it would have to sign up for limits on Exec remuneration. Why then not offer these highly lucrative terms to existing shareholders - I wonder. Could it be that in doing so it would have to publish a detailed prospectus showing that it really is trading as well as it says it is. Remember the last fund raising from shareholders was an 'open offer' and not a rights issue which conveniently also avoided the need for a prospectus. Something odours.

#16 I didn't see HSBC moving its headquarters to Bermuda (its registered office) or to Hong Kong (its main base of operations where it also issues currency notes) !! So I doubt that Barclays will move to Dubai !!

Having said that, Dubai airport is miles better than Thiefrow and far more friendly !!

Barclays negotiated a deal to pay more for their bailout than HMG was charging? Shirley shome mishtake - you don't mean our beloved leaders have done a suboptimal deal for taxpayers?

I think problems for business are only just starting I had my routine overdraft meeting with my bank manager yesterday. This is usually a cosy chat as our business is strong and growing well. As I expected I am going to have to pay a great deal more my overdraft facility - whether I use it or not ! including an increase in the "arrangement fee" by 166%!

To cap off a wonderful meeting he also told me they could n't help to finance a sale guarenteed by irrovocable letter of credit (put simply a short term loan against a promissary note) because quote - "we (the bank that is) have n't got any money" so no sign of the promised liquidity at the sharp end. Whats the point of doing business with a bank that does n't have any money?

Quite simply for SME's like ourselves the business environment is completely changed. We have a good business the chance to grow rapidly but we won't be able to do this because we can't get funding for working capital.

Good - it means what Barclays gets up to is none of the publics business - it is between the shareholders and the board.

Also having a private company up against nationalised ones will allow everyone to see how poorly nationalised companies perform...

Barclays can act as a benchmark, instead of the government setting an artificially low benchmark and then congratulating itself on exceeding it.

Your comment on barclays improved performance recenly already put the lie to any nationalised bank claims of 'it is hard for everyone, this is the best that anyone could have done'.

'Greed' isn't good or bad, it is an element of human nature - you can be stupid and try to supress it in others, or you can be smart and use it to get the results you want.

So, by next June, a majority of the equity in Barclays plc is likely to be owned by the state investment funds and royal families of Qatar and Abu Dhabi. Does anybody really believe that Barclays will then be permitted to retain the US interests of Lehman Bros on which it is pinning its hopes? After all, the prospect of Dubai owning 6 US ports was too much for US politicians to stomach, so why should the more protectionist bunch likely to be elected on Tuesday smile on Gulf ownership of what may emerge as the most powerful investment bank in the US?
The best we idiot shareholders can hope for is crumbs from the inevitable sell off of assets.

Brown is already starting to tell "his" banks what to do. Boy am I glad I have banked with Barclays for years and at least my bank will not be subjected to the Socialist dictats from Brown, Darling, Mandleson, Balls, Rosa Klebb etc etc.....

I'm not a shareholder in Barclays but I fully agree with #5.

This is a rip off for shareholders.

Massive dilution, adverse discrimination and no option to take up a rights issue to prevent it.

I'm inclined to think much of this has to do with pride - just to be able to say we didnt need govt help - and protecting their ability to pay themselves obscene amounts.

After all, the govt has said it wants out of bank shares asap so if you were really such a great bank, just buy back the govt holding over the next year or two.

The coming engineered collapse of the Dollar creates an urgency in the Arab States to buy substantial assets.

I think it is a very smart move. Abu Dhabi and the Emirate states are forward looking. They know that oil will last forever, and are prepared to do something about their future unlike our glorious leaders.

We all know about the leisure complex that has been built in Dubai - hotels, golf courses, motor racing circuits, shopping facilities (Bond street and harrfods can only envy) and even artificial snow ski slopes! Abu Dhabi also wishes to get into the act, but know they cannot compete with Dubai by playing the same game.

Instead they are investing heavily in solar power energy, but using new technologies. Solar power technology used in in the west has really not evolved in the last 30 years, certainly at nowhere the same rate as PC technology for example. An IBM PC 30 years ago had a hard disk with say 40 mega bytes and limited graphics; now you are talking about 100 giga bytes hard disk and almost unlimited graphics as bog standard.

The key here, is the long term view something British myopic politicians cannot get their head round. Therefore the climate is right for an international bank to do a lot of business with local start ups who will be encouraged by the voteof confidence in that institution by the ruling figures in the Emirates.

Whether we are now seeing a historical shift in economic power from europe and north America to the Persian Gulf; or perhaps it is part of the shift to the Pacific ring. From a customer base point of view, the muslim religion forms a significant part of the world's population and this may provide an opportunity to tap into this market. Although this may require Barclays to adapt or give charge concessions to appease these new customers.

I agree with other posters, that the thought of having HMG looking over your shoulder and giving advice on who or what to loan to must be very scary indeed. Remember lottery money was earmarked for charitable good causes, but over the past few years this has been eroded away as a supplement to government spending as the current administration has abrogated its responsibilities.

Robert

You forgot their structured finance business. Its a little difficult to have a very successful tax efficient structured finance business when your major shareholder is HM Treasury.

Unless you were being more subtle when you referred to valuing their independence.

#8 wykhamist wrote

"Well I can only say that those billionaires in the UAE cannot be very smart with their money.

These guys already stumped up a load of cash back a few months ago when the shares were apparently 'cheap'. Talk about throwing good money after bad.

We should be grateful, I suppose, that it is their money and not tax-payers' being lost. However I have no doubt that Brown will manage to lose our money just as effectively elsewhere."


I think that you will see more of this. Investors will move in and invest in the banks as they know that their money will be safe as their is still a promise to pay by HMG if the doo doo hits the fan. It really is taking the piss!

As Barclays financed BOTH sides in world war 2 through accounts and companies based in Switzerland and made a huge killing from war reparations paid to Germany, are they now strategically placed to finance both sides in another world war. They wouldn't be able to do this if HMG was calling the shots at the bank.

Just a thought...

Robert,

It is clear that no bank wants money from HMG because not one of them will give up their arrogant self interest. I was in full favour of the USA/UK bail outs, but now I'm not so sure. I do feel that we should have let at least one bank go to the wall, if only to prove the point that they are vulnerable and cant expect to be wet nursed through a depression. The chancellor would have been in a much stronger position, if say Northern Rock went out of business, which quite frankly it should have done. At the moment, not one pig ignorant bank has national interest at heart. Let them sink beneath the waves and start again.

The chancellor must introduce positive reform soon. If the banks don't like it, tough. If Mervin King doesnt like it, sack him.

Barclays have firmly nailed their colours to the mast. Its now time we did the same.

I wonder if part of the Barclays' decision was the wish to avoid lurid tabloid headlines from the BBC about Barclays needing to be bailed out by the Government??

It is outrageous that the new securities are only being offered to these middle eastern investors. The same deal should be offered to all existing shareholders.

So in a nut shell the senior executives at Barclays have agreed a dubious deal with Abu Dhabi and Qatar rather than HMT just so that they can carry on paying senior executives silly money.

If your assumptions and intepretation of this terms of this deal are correct (i.e. there are no obvious financial advantages) then I too find it astonishing to learn that bankers in this country would prefer to do a deal with an overseas state investment fund rather than with their own government.

The real question now to be asked and answered is, are the senior staff of this bank being overly induced by the prospect of a huge payout if things go as they believe they will over the short term or next couple of years.

If that is the case then perhaps the shareholders of this company (and maybe our own government) should ask some searching questions about how the managers Barclay will benefit "personally" from this deal. One suspects that short term personal gain (greed) is being put ahead of sound long term benefits for the bank and it's smaller shareholders.

You forgot the interim management statement from HSBC on Nov10th commenting on N America operations. Should be a good indicator from the eye of the storm as HSBC held their subrime loans vs. repackaging and selling...

What bothers me is the political influence that this deal will give the royal families of Qatar and Abu Dhabi over the UK government.

There have been several instances where the feudal leaders of Middle Eastern states appear to have had a great deal of influence over the UK government. For example the non prosecution of BAE.

Suppose the UK government's foreign policy did not suit the new controllers of Barclays, might they not threaten to move the HQ away from London.

WHere do HSBC and Standard Chartered pay taxes? In the UK, I rest my case.

#38. supercalmdown

What makes the state a better landlord than the private sector?

Also the cost of ensuring that every property was up to scratch would required signficant finance up front.

If people can't afford their mortgages, what makes you think they could afford rent?

If as a taxpayer, I am supposed to subsidise their rent, what do I get in return?

Such a diverse range of properties would needs case by case handling - far better suited to lots of small private enterprises - possibly encouraged with tax-breaks but fundamentally paid for by the tennants not by the tax-payers.

I presume that as the Government has stopped bonuses for board members of banks that it has lent to, Barclay's will follow suit as there is no need for a money incentive to attract the best people to Board level.

sorry they may not be moving, I mistook the TOILET sign outside Barclays for a TO LET sign

I wonder if Robert Preston is the mouthpiece of Gordon Brown? Not only did his blog help to bring down the banks earlier in the month, he is now trying to undermine Barclays who obviously do not want the 12% interest rate payable to HMG. Under that agreement the shareholders do not get returns, and therefore there is no incentive to invest. The US has a 5% return and Germany also changed from 12% to 5% in order to stimulate investment and liquidity. Roll on the nationalisation and control by Labour!

You peeps from Englandshire probably won't have noticed that here in sunny Aberdeen the Abu Dhabi national oil company TAQA is making its presence well and truly felt by investing heavily in N Sea oil/gas assets.

My wee pal Alex Salmond is right.. A small country can do a lot with a decent size oil fund...

Comment 56 : godfreybrown

"If your assumptions and intepretation of this terms of this deal are correct (i.e. there are no obvious financial advantages) then I too find it astonishing to learn that bankers in this country would prefer to do a deal with an overseas state investment fund rather than with their own government."

But are Peston's assumptions and interpretation correct, Mr Brown? What corroboration has he for taking the stance that Barclays have no commercial reason to fear the conditions attached to Treasury rescue? How can he, as an independent journalist, write an article that is so biassed in favour of the government's "rescue" plan that it is unwilling even to acknowledge that people have a right not to take at face value anything that this government would have us believe.

It's completely outrageous that the BBC should see its primary duty to be to support the Establishment, before the truth.

# FYI HSBC does have a registered business in Bermuda this is a legacy of their acquisition of Bank of Bermuda and is maintained as this business caters mainly for Caribbean registered Hedge Funds (probably for regulatory reasons) HSBC also has registered businesses in UK, Hong Kong, Brazil, USA, Turkey and many more countries with the lions share of profits currently coming through their Asian registered offices. I suspect the Standard Chartered office in South Africa is as a legacy of the company originally being founded form a merger between a South African bank (Standard Chartered bank of British South Africa) and the chartered bank of India, Australia and China at the time both of these banks were British as they were domiciled on British Empire territory, although you may be mixing Standard chartered up with Standard bank of South Africa this is quite an easy mistake to make as it was originally created as a divesture of Standard Chartered South African business. Nonetheless due to the global nature of business it is not uncommon for companies to have a registered office in the country they conduct business in.

its obvious that barclays management just doesnt trust this government or its rescue attempts, so they will have to pay higher rates well it will only come out of the people who use barclays.
its odd that they seem to be the only bank that has used another method to raise capitol and have shown that a bank can go it alone in these times without government intervention are they foolish well we shall see as time goes on.

In reply to #50:

Anyone who believes banks cannot fail because they are 'backed' by HMG is in for a shock, I fear.

It's like saying that Tesco shares are a good buy because 'people have to buy food however bad the economy gets'.

Thailand has started bartering rice for oil. What do we have to barter with? bankers?

We are basically heading the same way as Zimbabwe. The currency worth nothing, no food in the shops and people relying on hand-outs to survive (the lucky ones).

Sorry to sound gloomy, but the whole system is coming down in my view. We should be worrying about what we can do to produce the basic requirements for life, not worrying about anything else.

I think it's wrong to say that Barclays raising capital from the sovereign wealth funds of Abu Dhabi and Qatar is "de facto nationalisation". The sovereign wealth fund are managed by professional investors. Their aim is to secure a good long-term return on the wealth of these countries to ensure that, after the oil has run out, future generations still have an income. They have no interest in political control, only in financial return.

As a Lloyds TSB shareholder myself, I must say I wish I was a Barclays shareholder instead. I think in the medium term Barclays will now have a distinct advantage over its UK competitors who have had to take the "Queen's shilling". Free from political control, the management will do what is best for all its shareholders.

I am also surprised that the UK Government seems to be getting the exclusive right to acquire those 12% preference shares. I know a lot of Lloyds TSB small shareholders like myself who would jump at the opportunity to buy those instruments, as you yourself point out at a time when interest rates are likely to drop dramatically.

#17 /#31 / #34

A quick update on facts, in Islam the taking of interest is banned. What the investment funds of Abu Dhabi and Qatar are doing is called investment they are recieving dividends which are based on the profit and loss of an organisation. e.g. if Barcalys perfom badly and make large loses they don't get their substancial dividends, whereas interest is paid out regardless.

'HSBC also has registered businesses in UK, Hong Kong, Brazil, USA, Turkey and many more countries with the lions share of profits currently coming through their Asian registered offices.'

Yes thats because HSBC stands for the Hong Kong and Shanghai banking corporation (i.e. it originated in those cities). Did the British taxpayer moan when HSBC moved its headquarters away from Hong Kong to London in 1997? Of course not.

'We are basically heading the same way as Zimbabwe. The currency worth nothing, no food in the shops and people relying on hand-outs to survive (the lucky ones).'

Of get off your high horse! That is a ridiculous comparison - Britain will not end up like Zimbabwe! Idiot.

Barclays will be able to attract better talent to its top level positions, and lend on commercial criteria rather than political ones...

Ahh the usual sensationalist pap mr Peston!

One thing no-one seems to consider is whether Barclays is going to use this money for capital requirements or for acquisitions.

Barclays has a strong management team and a decent set of longterm shareholders so they are in a real position to take advantage of the situation.

After all it has added Lehman's operations for almost nothing, a profitable business and a load of top staff for $150 Million. I wouldn't be surprised to see Barcap snapping up other bargains in this market!

With this whole "crisis", no-one seems to have noticed the HM Treasury is lending money to Lloyds to buy HBOS and create a dominant player in current accounts, savings and mortgage market in the UK.

If HMT is going to re-capitalise the combined bank, why do they still have to proceed with the shotgun marriage?

Dear Rob,

I think Barclays is also owned by RBS eventhough they have kept seperate entity?

I may be wrong!

Barclays in the grip of Brown as well as HBOS and RBS. Guess where any favouritism would end up. North of the border perhaps??

Stay clear Barclays.

#71 getinthebath

not sure what you are getting at here, I would be surprised if people did not know HSBC stood for Hong Kong Shanghai Banking corporation and although it originated in those cities it was founded by a brit to facilitate british business in that region. Given that Hong Kong was part of the British Empire in one way or another it has always contributed to the UK, however my previous post you comment on in know way is a rant at HSBC but was more to clarify to an earlier posting that although they have a Bermuda Registration HSBC holdings is not only registered in Bermuda. the lions share of profits may currently be coming from Asian operations but I have no doubt that will not always be the case as HSBC has many other offices. Lets not forget that they pay local taxes on local profits so it is not as if China does not get a fair share of revenue from business conducted by HSBC in Hong Kong. The fact that HSBC moved it's office from Hong Kong to London was more as of a result of uncertainty surrounding business conditions once Hong Kong was handed back to the Chinese.

I'm glad Barclays went and got overseas capital, we as taxpayers don't need to be burdened with all the risk, although perhaps we should look at closing a few tax loopholes to let the profits be made by the investors untaxed.

As to the remuneration, well, if the shareholders think the people who are running their investment are worth it, thats up to them, as long as if things go bad, Barclays are not allowed to come running to the UK taxpayer for a bailout.

Am I alone in thinking that Peston should SHUT UP!

The FSA should enquire into certain comments he made about HBOS. And the profits that were made.

But the FSA are utterly useless.

Dear Robert,

Fascinating.

You would make the perfect DR WHO !

As a shareholder I have been trying all day to get hold of Barclays Investor Relations but without success. I suspect it might have been easier to get hold of Josef Fritzl's relations.

As a person who banks with HBOS and, due to the switch from mutual to stock market, a share holder I see this whole problem as one of a new stealth tax. The present government, known in the past for having the World bank in to keep it in line under Wilson, has not just allowed the situation to build up but actively encouraged it.

When I first bought a house I needed 10% at least of the price to get the mortguage, I then had interest rates of up to 15 % to contend with and when I finally paid off the loan I found that the present government made saving totally pointless with interest rates lower than infaltion. This governemnt also raided the pensions so that our savings were reduced at a stroke and our pensions with them.

If I were a banker I would not trust this bunch of chancers, we call a government, further than I could throw the Palace of Westminster. My view is that the Brown government has allowed the situation to go this far so they now have another nice little earner for the Treasury in the Banks, so we are now all paying the government again and those with shares will be out of pocket just as Brown and Darling wanted.

I do not see the banks that have had part of their share structure taken over by the government ever getting back to being independent, the Treasury will never be able to let the finance go as it will be propping up the tax system.

Arabs have controlled world's oil markets and now very happy to control banks. What's next?

yes lord carty cartland, you are alone... all alone..

Where was the balance in Robert Peston's reports, both on Radio4 and BBC One?
All the reports I have heard today give me concern that the Business Editor is trying to become more of an actor than a responsible financial journalist. What a third rate drama performance on the Six O'Clock News tonight! He appears to have totally overlooked the question of dividends over the next few years. The banks who are now government subsidiaries will be unable to pay dividends for the forseeable future. As a small shareholder of Barclays I am not upset that they might not pay the next dividend or reduce it. Those of us who are pensioners may rely on dividends to supplement our income and it is going to be tought for a couple of years. Who will revert to paying normal dividends first, Barclays or those that are now UK Government subsidiaries? Step back a step Robert and start using th skills you used to have!!

Can the shareholders stop Barclays from getting money from the middle east? What is the procedure on this?

OK, so Barclays borrow from Muslim states and royal families in preference to GB. Maybe thats good?

Does this mean a transformation of the company that bank-rolled apartheid for so many years? Surely they will stop charging interest on their loans and operate within the principles of Sharia economics which Wikipedia defines as

" an economic system based on uplifting the deprived masses, a major role for the state in matters such as circulation and equitable distribution of wealth and ensuring participants in the marketplace are rewarded for being exposed to risk and/or liability. Islamists movements and authors will generally describe this system as being neither Socialist nor Capitalist, but a third way with none of the drawbacks of the other two systems."

Bring it on Barclays! I am not a Muslim but someone with a social conscience and I am delighted to find that Barclays have seen the light! Fantastic!!

I would like my money to help the poor and deprived in England and else where in the world. so send me your prospectus! Are you now in competition with the co-op and building societies?

Yours in sisterhood
Purplesusie

What would you say about P.M Gordon Brown's trip to the Middle East to impress upon them to invest and to shore up the economy (probably the world economy but more so of U.K?). I think Barclays where a somewhat ahead in their thinking and quickly took the opportunity to rope in the wealthy/cash rich Middleeast Kingdoms. Why talk of United kingdom! So what's wrong in doing that? I do not see any fault their move. The other day people were very concerned about tax-payers money being pumped into banks to shore their sagging morale but now in your article you are

What would you say about P.M Gordon Brown's trip to the Middle East to impress upon them to invest and to shore up the economy (probably the world economy but more so of U.K?). I think Barclays where a somewhat ahead in their thinking and quickly took the opportunity to rope in the wealthy/cash rich Middleeast Kingdoms. Why talk of United kingdom! So what's wrong in doing that? I do not see any fault their move. The other day people were very concerned about tax-payers money being pumped into banks to shore their sagging morale, so I guess Barclys did not wnat to b a part of that, so what?

Barclays nothing - pride of place must go to Goldman Sachs which has managed to get the US taxpayer to pay to it slightly more than it will now give out in bonuses and pats on the back. Banks are pragmatic above all, with their own set of ethics, if they can get away with it ...why not?

Barclays is positioning itself to recycle the mid east oil revenues in sterling and euros should the dollar dive and if there is a revolution in the middle east the money is off shored and will stay that way with help from the prevention of errorism[catch all] act .

Also the international jolly roger types and nondominnows might not wish to do buisiness with a government bank for reasons of greater confidentiality offered by the non government one/s

Then their is the question of the mperrors wishing to increase the transparency about their AAA's holes as a prelude to a liquidity injection followed by the tailerrs latest fasion statement for the fat cat walk ...which Barclays[rightly] wanted nothing to do with[ also not wishing to be tumbled by the buoys in blue ]

I've never been much of a fan of Barclays Bank (or any bank come to that) but any business that has the ggod sense to stear well clear of HM Government must be pretty shrewd!

And why is a UK bank being criticised by tax payers for NOT taking their bail out? Surely all the other banks were being criticised a fortnight ago because they DID take the bail out.

Make up your minds people!

Just like the Ross/Brand farce this week, commentators cannot resist bringing in pay scales and bonuses to what is surely a matter of principle. Me thinks that rather gives away the underlying motivation... PURE, SIMPLE ENVY.

It is not envy.

Pray explain why a middle easter deal to preserve bonus's is chosen above fair dealing for share holders.

The crooks on charge can chart their own course of course, but their self interest is well evident.

Seems about half of you folks would prefer it if Brown hadn't come up with his plan to take equity in UK banks...

To think, by now we could have been foraging for food, fighting off looters etc.

Also, it seems that some of you want to look at this from the banks' viewpoint, as if they're the innocent victims in all of this.

Blaming politicians, even central bankers, for this mess is completely deluded.

It is all the fault of greedy banks

I just hope that they have a very long spoon.

This comment was removed because the moderators found it broke the house rules. Explain.

Management keep saying they are "acting to preserve the right of self-determination".

Right of Self-determination for whom? The management or the owners (shareholders)?

Whilst the alternative, of HMG partial-ownership, is not an option anyone likes; it is still clearly the least-worst alternative on economic and fairness ground.

Economic because as has been extensively written, the Qatar/AbuDhabi offer is far more expensive - and the muted benefits of "developing closer relationships with the Middle East" is clearly hogwash.

On fairness ground - because the UK banking sector (as in most other countries) are now implicit govt-backed entities. "Agencies" as would be called in the US. If HMG pulled out their various life-support measures, BARC would be insolvent at this point in time. If that is the case, then it is unfair to strip the option of potential future profits from the taxpayer, on to a new (non British) shareholder.

Incidentally, a quick google search of the banker leading the fundraising in the middle-east, raises some 'interesting' stories. The most interesting being the size of his bonus - several times higher than either of his bosses, or anyone else in the industry - and probably the highest in the whole organisation. But of course, that would never be a motivational factor, would it?


Another clear case of the dictatorship of management in public companies.

By the management, for the management.

For those people with an interest in the financial crisis please check out the documentary:

Enron: The Smartest Guy In The Room [2005]

Goverment, Business, Banking, Utilities has it happened again, greed and the only ones paying the consequencies are the innocent.

It is quite clear that the 'Bankers' chose to defend their own inept position because they could.

Such behaviour was the root cause of this in the first place.

Share holders can be confident in the reality that they have only a few thousand feet before gravity claims her just deserts.

What about the ethics of this deal - accepting funds from non-democratic states, that severely restrict freedom of religion, and grant few rights to the majoity of their population namely ex-pat workers from the indian sub-continent. This deal may severely damage Barclays' corporate image and reduce its customer base.