Barclays’ chairman Marcus Agius rules out break-up

| July 30, 2012 | 0 Comments

By
Ruth Sunderland

16:24 EST, 29 July 2012

|

16:24 EST, 29 July 2012

Barclays is turning a deaf ear to pressure from investors to break itself up in order to signal a decisive move away from the tarnished reign of former boss Bob Diamond.

The defiant stance from temporary chairman Marcus Agius comes as rivals HSBC and RBS brace themselves to reveal hundreds of millions of pounds of fresh write-offs for mis-selling and other scandals this week.

Agius has weighed up the idea of splitting off the so-called casino bank, Barclays Capital, the investment banking empire that was built by Diamond and that fuelled his controversial rise to the top.

Defiant: Agius has weighed up the idea of splitting off Barclays Capital but the bank's remaining board is of the view it is too valuable to ditch

Defiant: Agius has weighed up the idea of splitting off Barclays Capital but the bank’s remaining board is of the view it is too valuable to ditch

But the bank’s remaining board –
depleted by the resignations of Diamond, his aide Jerry del Missier and
pay committee chair Alison Carnwath – is of the view it is too
valuable to ditch, given that it contributed more than 60 per cent of
the bank’s £4.2billion profit in the first six months of this year.

They believe the investment bank is
an integral part of the business model as large international clients
need a range of its services including foreign exchange and hedging
products.

Barclays, which is on the ropes over
its role in the Libor rate-rigging scandal, revealed on Friday that its
finance director Chris Lucas and three other current and former
executives are under investigation over fees in its 2008 fund raising.

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Rival bank HSBC will today own up to hundreds of millions of pounds of
mis-selling costs but is still expected to report profits of
£8.2billion.

It has already earmarked £745million to cover Payment
Protection Insurance (PPI) claims, and hundreds of millions more to
compensate firms that were mis-sold interest rate swaps in a separate
scandal.

In addition, it will take a write-off for failing to prevent money
laundering by Mexican drug barons and Middle Eastern banks suspected of
financing terrorism.

Stuart Gulliver, the chief executive,
is also overhauling the private bank so there is less scope for wealthy
individuals to shelter their money from the taxman offshore.

British clients of its private bank
based in Switzerland are said to have evaded more than £200million in
tax. It is not yet clear whether HSBC will be dragged into the Libor
scandal.

RBS on Friday will be also forced to
come clean on the consequences of another series of disasters including
the computer meltdown that could result in a bill of up to £100million.

Stephen Hester, the chief executive, yesterday said RBS faces a big fine over the Libor scandal.

The bank will disclose a further hit
for PPI, possibly of £150million on top of the £125million for the first
quarter of this year, along interest rate swaps mis-selling.

Analysts forecast losses will swell to £1.5billion for the first half, from £794million last time.

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