Bye-bye Barclays

Bye-bye Barclays

So far, everyone is playing their cards close to their chests. What we know for sure is that 1,600 employees in 147 branches up and down the country are wondering for how much longer they will hold on to their jobs. The bank has been scaling back for the last two years, with the closure of as many as 120 branches and the loss of around 500 jobs.
As the Diário Económico published question-and-answer information aimed at allaying customer fears (see box story), unions have stepped in in a bid to safeguard their members’ futures.
Febase (the federation of the financial sector) has already contacted UNI Global Union, an international platform of syndicates, to try and organise a meeting in London with Barclays’ administrative chiefs.
At the same time, Angolan Banco BIC has intimated that it might be interested in a quasi take-over.
Talking to Jornal de Notícias at the weekend, BIC’s executive president Mira Amaral said: “I admit we are interested in taking over some of Barclays’ branches, as well as keeping some of their employees and even part of their business.” But this is far from being an assurance.
Elsewhere, Santander Totta’s President Vieira Monteiro admitted his bank was considering purchasing some of Barclays’ financial assets, but denied interest in purchasing any of the branches.

The cause of the rot

As customers woke up last week (May 8) to the announcement that Barclays was finally putting its house in order and slashing jobs and services, those in the know admitted the news came as no surprise.
It followed all manner of financial horror stories and pre-empted another embarrassing shock.
On Monday morning (May 12) it was announced that Serious Fraud Squad officers in London were interviewing 12 former Barclays’ employees under caution regarding dubious fundraising operations by the bank in Qatar in 2008.
Among those being grilled were former chief executives John Varley and Bob Diamond.
Diamond quit his job as Barclays’ boss last year – leaving under a cloud of controversy over the manipulation of Libor interest rates by traders at the bank – and it is his predecessor Anthony Jenkins who has forged through this latest restructuring plan.
Operations in Portugal also rocked the bank last year, following the suspension of four former bank managers over allegations of market rigging and cartel activity.
An internal inquiry recently cleared nearly all involved, but by then the mud had well and truly ‘stuck’.
Barclays Portugal had become merged with operations in Spain, and what remained is now considered by Jenkins as part of Barclays’ ‘bad bank’ – to be offloaded as quickly as possible.

Jenkins’ restructuring plan

The “restructuring plan” will see a “bold simplification of Barclays” which will still maintain some international operations – albeit only in “areas where we have capability and competitive advantage”, said the group’s troubleshooting chief executive.
The simplification in Portugal will focus on shedding ‘retail operations’ (meaning bank branches) and focusing instead on the more profitable areas, like Barclaycard services and private and corporate sectors.
Globally, the changes will see up to 19,000 jobs disappearing within the next three years, but the end result, promises Jenkins, will be a ‘go to’ bank “leaner, stronger and much better balanced and well-positioned to deliver lower volatility, higher returns and growth”.

|| Find out what will change with the sale of Barclays’ retails operations

On May 8, Barclays sent out a statement to its workers clarifying what the restructuring plan will mean to clients. Diário Económico has put it into a nutshell:
I am a Barclays client. Are my deposits at any kind of risk with this operation?
No. Your deposits will be transferred over to the buyer, which in reality means that you will have a new entity managing Barclays’ operations. It will have to respect the contractual obligations previously agreed upon, like interest rates, until contracts expire.
What if I have a loan? Can the buyer change my conditions?
Like before, whoever purchases Barclays’ operations in Portugal will have to respect the contractual agreements between the bank and client.
I am in arrears and negotiating a payment plan. Can I keep that plan after the bank is sold?
It depends how far along the negotiation process has come. If it is already agreed upon, the buyer will have to respect and fulfil the agreement. If the renegotiation process is not completed, you may have to negotiate a new deal with the buyer.
After the bank is sold will my account be transferred automatically to the new institution? Will the process cost me any money?
Yes, the transfer should be automatic. The client should not have to do anything, as it is the new bank’s responsibility. At the time, the buyer will inform the client of the change, which should not cost the client anything.
What happens until the bank is sold?
For now, nothing happens. Barclays will continue to work in Portugal until the process is completed. The bank has in fact reinforced its commitment to its clients.
And what if Barclays cannot find any buyers?
If no buyers can be found (which is unlikely), the bank can choose to simply close down its operations in Portugal. If this happens, its commitments to Portuguese clients should be taken up by Barclays’ head office, which will manage these clients’ accounts albeit not accepting any new clients.
Barclays will still maintain some small businesses in the country, like the Barclaycard, thus maintaining some physical branches which will ensure interactions between the bank and Portuguese clients.