|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||2.1200 - 2.1685|
|52 Week Range||1.6000 - 2.2900|
|Beta (3Y Monthly)||0.69|
|PE Ratio (TTM)||77.45|
|Forward Dividend & Yield||0.09 (4.46%)|
|1y Target Est||N/A|
Jes Staley, Barclays CEO, discusses Brexit and the tough interest rate environment for the financial services industry right now.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. South Korea’s exports -- a bellwether for global trade -- are poised for an 11th monthly decline as China’s economy slows and tech demand struggles to rebound.Exports during the first 20 days of October fell 20% from a year earlier, data from the Korea Customs Service showed Monday. Shipments to China, South Korea’s biggest trading partner, also dropped 20%.South Korea’s exports plunge extends the gloomy outlook for the world economy after Japan’s exports dropped for a 10th month in September. Higher tariffs and uncertainties from the U.S.-China trade war have probably cut South Korea’s growth by 0.4 percentage point this year, Bank of Korea Governor Lee Ju-yeol said Oct. 18 in Washington.Japan’s Exports Continue to Drop as Global Slowdown WeighsThe trade weakness is also hurting domestic demand and helped push South Korea’s consumer prices index below zero for the first time ever in September. With Asia’s fourth-biggest economy headed for the slowest expansion since the global financial crisis, the government is ramping up spending while the Bank of Korea last week cut interest rates for a second time this year to support growth.The latest trade data indicates there’s no immediate sign of the outlook improving for the economy, despite a tentative truce in the U.S. and China trade war. Considering the difference in the number of working days, daily exports value fell 13.5% on average during the first 20 days of October from a year earlier, the data from the customs office show.“The worst for exports may be over, but a meaningful rebound also appears challenging,” Angela Hsieh, an economist for Barclays Bank PLC, wrote in a report. Semiconductor sales, which account for the largest share of exports, declined 29%. Overseas shipments of automobiles dropped 6.5%.Overall imports fell 20% in the first 20 days of October from a year earlier. Exports to the U.S. slid 17%, while imports dropped 22%.Shipments to Japan dropped 21%, while imports plummeted 30%. The two neighbors are embroiled in a trade spat linked to lingering disagreements over Japan’s colonial past.(Updates with new chart, Bank of Korea assessment)To contact the reporter on this story: Sam Kim in Seoul at firstname.lastname@example.orgTo contact the editors responsible for this story: Malcolm Scott at email@example.com, Jiyeun LeeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
to support his Brexit deal as he seeks to build momentum ahead of MPs voting whether to pass the agreement with the EU this weekend. In a letter to businesses seen by the Financial Times, the UK prime minister said that “the priority now is to deliver Brexit and provide the certainty businesses need so that the country can come together and move on”. Downing Street followed up the letter on Friday with calls for leading executives to support the deal, which officials hope will be enough to win over businesses keen to end the uncertainty over Brexit that has stalled investment decisions and forced them into costly stockpiling and contingency planning.
The Serious Fraud Office’s high-profile fraud prosecution of three former top Barclays bankers, and the implications it holds for the former prime minister of Qatar, is “preposterous” and “unworthy of belief”, a jury has heard. in 2008 when they negotiated secret side deals with Qatar as the Gulf state injected about £4bn into Barclays across two emergency fundraisings worth £11.2bn that helped keep the bank from a UK government bailout at the height of the financial crisis. The three men, who have all long since left Barclays, are charged with conspiracy to defraud and substantive fraud offences.
A former top Barclays executive, on trial in London on fraud charges, would have risked a 50 million pound ($64 million) "good leaver" package if he had sought a criminal deal with Qatar during the credit crisis, a court heard on Thursday. It would have been "lunacy" for Roger Jenkins, one of three men charged with fraud over undisclosed payments to Qatar during emergency fundraisings in 2008, to risk such accrued benefits and a job that had paid him 38 million pounds in 2007 alone, his lawyer told a jury at the Old Bailey criminal court.
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.A historic pound rally was stopped in its tracks by doubts over whether a Brexit deal can win the approval of U.K. lawmakers.The investor optimism that drove sterling up at the fastest pace since 1985 has mostly evaporated since U.K. Prime Minister Boris Johnson’s Northern Irish allies said they wouldn’t back an agreement reached with Brussels Thursday. With a critical Parliament vote on the deal due Saturday, options traders have become the most bearish on the currency over the next week since April, putting sterling’s 5% gains over the past week in doubt.Investors are staying cautious as Johnson’s predecessor Theresa May saw her own Brexit deal rejected by Parliament three times, eventually toppling her leadership. Pulling it off would pave the way for an end to the political drama that has roiled U.K. markets for the past three years, while a rejection would open up the prospect of an imminent election or even a no-deal Brexit.“You could see a 3% gain in sterling or a 3% loss depending how this vote goes,” said Marvin Barth, head of currency research at Barclays Plc, in an interview with Bloomberg Television. “We’re all just going to wait on the edge of our seats. If you haven’t put on a position yet it’s probably too late.”U.K. markets have been in the grip of Brexit since 2016 with the pound being the main sentiment barometer -- it plunged to its weakest since 1985 in a flash crash in October that year. Sterling is still down 13% since the referendum, while the FTSE 100 share index has rallied 13% as a weak currency boosts British firms’ overseas earnings.The pound edged up 0.2% at $1.2854 by 3:30 p.m. in London, after touching a five-month high near $1.30 earlier. U.K. government bonds reversed losses to send 10-year yields down two basis points to 0.70%, while the domestically-focused FTSE 250 stock index clung onto gains of 0.4%.Parliament EyedThe EU’s chief Brexit negotiator Michel Barnier said he believes the deal can be ratified by the end of October, with European leaders looking at the details in a summit Thursday.Investors’ main focus will instead be on reaction from U.K. lawmakers ahead of the emergency U.K. parliamentary session slated for Saturday.Pound-dollar risk reversals, a gauge of options market sentiment and positioning, stand at 104 basis points in favor of selling the pound over the next week, the most bearish sentiment for sterling in six months. That is also a turnaround from bets in favor of buying the pound on Wednesday.Approval by Parliament is a major risk as Johnson does not have a majority and lawmakers remain divided on Brexit. Opposition parties including the Scottish Nationalists have already said they reject the deal, leaving the government reliant on votes from the DUP and rebels within their own Conservative Party and Labour.The cost of hedging pound swings in the next week remains close to the highest since the 2016 referendum. Approval for the deal at the weekend sitting may lead to a pound rally to $1.40 but no further for Barclay’s Barth, while failure could mean a slide to $1.20 and below.“Betting on further volatility still looks like a decent prospect, and better than taking a position in the spot price,” said Stephen Gallo, head of European currencies strategy at the Bank of Montreal.(Updates throughout.)\--With assistance from Michael Hunter, Anooja Debnath, Liz Capo McCormick, Vassilis Karamanis, Hannah Benjamin, Alice Gledhill, Tasos Vossos and Jonathan Ferro.To contact the reporter on this story: Charlotte Ryan in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Paul Dobson at email@example.com, Neil Chatterjee, William ShawFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The British pound surged on Thursday while equities registered moderate gains in the wake of an agreed deal between negotiators for Britain to leave the European Union.
The Pimco Preferred and Capital Securities fund is benefiting from banks' strong balance sheets as a result of heightened regulation
If the story of Britain’s high street is one of inexorable decline, then the paperback will be on sale at WHSmith. Paying $400m for gift shop group Marshall brings 170 new US outlets — 59 in airports — lifting WHSmith to third place in the $3bn US airport retail market. To retail analysts, the Marshall deal read particularly well.
(Bloomberg) -- Former Barclays Plc executive Roger Jenkins negotiated a 25 million pound ($32 million) bonus for securing billions of dollars from Qatar at the height of the 2008 financial crisis, averting a U.K. bailout, a prosecutor said during his fraud trial.Jenkins led discussions with then-Prime Minister Sheikh Hamad Jassim al Thani, which resulted in an investment totaling from the gulf state’s sovereign-wealth fund and Sheikh Hamad, lawyers from the U.K. Serious Fraud Office said. The agency is prosecuting Jenkins and two other ex-Barclays executives for having allegedly hidden 322 million pounds in fees the bank paid the Qataris as a sweetener for the deal.Qatar’s investments came as part of two Barclays cash calls in June and October 2008, which raised more than 11 billion from all investors. When the second capital raising was approved by existing shareholders, Jenkins emailed colleague Rich Ricci arguing that then-Chief Executive Officer John Varley and investment banking head Bob Diamond should give him a special bonus, according to evidence shown to a jury in London Wednesday.“This capital did the trick,” Jenkins, the former Middle East head of investment banking, said in an email shown to the jury by prosecutor Ed Brown. “Why can’t varley, diamond” go to the compensation committee “and say we need to make a special payment for this endeavor now.”In March 2009, Barclays offered to pay Jenkins 25 million pounds in a “special award,” Brown said, citing a draft agreement for the payment. Varley, Diamond and Ricci are not accused of wrongdoing at the trial.The details emerged in the second week of a historic fraud trial, where the SFO is attempting to hold senior bankers accountable for alleged wrongdoing during the financial crisis. Jenkins and the two other co-defendants Tom Kalaris and Richard Boath, have all pleaded not guilty.Barclays paid the 322 million pounds via two agreements in which Qatar ostensibly committed to delivering services to the bank. The SFO claims those agreements were nothing more than a smokescreen designed to conceal the payments from other investors who weren’t getting the same deal.On Wednesday, Brown focused on the fact that the bank’s agreement to pay Qatar for advisory services in October 2008 came only 16 weeks after a similar arrangement that largely covered the same period. Barclays agreed to pay Qatar 280 million pounds for the services, which the bank had valued at $39 million only days earlier, Brown told the jury.“Having announced publicly that it was not going to take government money, it was imperative for Barclays to ensure the Qatari investment in late October 2008,” Brown said. “Failure to do so at that time would have had very serious consequences for the bank.”Jenkins and Kalaris didn’t answer questions when the SFO interviewed them in 2014 and 2016, Brown said, but both delivered written statements. In his statement, Jenkins said he didn’t lead the capital raisings or advisory agreements and wasn’t responsible for the decisions. The arrangements were approved by senior managers, including Varley, compliance and company lawyers, Brown cited him as saying.Kalaris largely echoed those comments, underlining what he described as his limited role in the process, according to Brown.In contrast, Boath sat for eight days of SFO interviews between 2014 and 2016. Boath said that the June advisory agreement was set up to pay Qatar the extra fees it was demanding, but that lawyers had told him that the mechanism was legal as long as the Qataris genuinely delivered the services, Brown quoted him as saying.To contact the reporter on this story: Franz Wild in London at firstname.lastname@example.orgTo contact the editor responsible for this story: Anthony Aarons at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The former chief executives of Barclays were “scared to death” at the prospect of a UK taxpayer bailout and “paranoid” about losing their jobs in 2008, as the bank sought a second emergency fundraising to secure its future, a court has heard. Roger Jenkins, nicknamed “Big Dog” by his Barclays’ colleagues and a defendant in a high-profile fraud trial at London’s Old Bailey, joked in October 2008 that John Varley, the bank’s chief executive at the time, was “scared to death that the government turn up tomorrow morning”.
(Bloomberg) -- A group of senior Barclays Plc executives agonized over adding a Qatari royal to a bailout of the bank during the 2008 financial crisis, but it wasn’t enough to kill the deal.The bankers, now facing fraud charges in a London court, were responsible for finding a multi-billion pound lifeline from Qatar to stave off nationalization by the U.K. However, the country’s prime minister, Sheikh Hamad bin Jassim al-Thani, intended to invest personally in exchange for a commission structured as an advisory fee.“It’s like having the president of the United States advise JP Morgan; you just can’t have it,” Roger Jenkins, Barclays’ former Middle Eastern investment banking chief, said of the secret deal that’s ended up in a London court.“It’s a bit dodgy,” banker Richard Boath agreed.“It’s his money. He wants his fee,” Jenkins replied. The deal, which called for a higher commission than other investors were getting, would need to be restructured, the bankers agreed.The comments were read during the trial of Boath, Jenkins and Tom Kalaris, who formerly headed the bank’s wealth division, in the most high-profile British case against senior bankers dating from the 2008 crisis. All three men have pleaded not guilty while former Chief Executive Officer John Varley was acquitted of similar charges in June.Varley’s former lieutenants, desperate to prevent nationalization by the British government, created a false and “misleading” audit trail to hide the fees they were set to pay to various Qatari investment units, prosecutors at the Serious Fraud Office said. At the same time, they were faced with demands from the Qataris themselves that the deal with the sheikh be kept out of the public eye.Following a meeting at London’s Hyde Park Hotel with a Qatari lawyer about the additional payments to Sheikh Hamad, Boath recorded that they’d agreed “to keep it secret between us for now.” He wrote: “How does he get the extra fee? Same mechanism!”After lengthy discussions in June 2008, Sheikh Hamad agreed to declare his interest in the Challenger investment vehicle, but Varley’s willingness to allow him to be paid the commission still amazed Jenkins, the point man on dealing with the Qataris.“I’m very surprised John Varley, given his ethics, is doing this,” he said.On the fourth day of argument in the trial, prosecutors highlighted how aware the bankers were of the appearance of impropriety. As a lawyer reeled off a list of criminal agencies and regulators, Boath riposted.“I am already feeling sick. There’s no need to use all those words to make me feel sicker.”As Barclays hesitated about the fees, Jenkins grew impatient, telling Boath in a note that other executives should overcome their concern that regulators may block the deal.“Stop messing around you stupid people,” Jenkins said in a phone call with Boath, which was played to the jury. “We want their money so take the f--king risk. Just put it in the prospectus, let’s just move on for f--k’s sake.”(Corrects sheikh’s full name in second paragraph)To contact the reporter on this story: Jonathan Browning in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Aarons at email@example.com, Christopher ElserFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Climate activists targeted BlackRock, the world's biggest asset manager, in London on Monday, demanding that major financial institutions starve fossil fuel companies of the money they need to build new mines, wells and pipelines. Extinction Rebellion, which uses civil disobedience to highlight the risks posed by climate change and the accelerating loss of plant and animal species, is midway through a new two-week wave of actions in cities around the world.
(Bloomberg) -- Emerging-market stocks halted a three-week slide last week and currencies rose as the U.S. and China agreed on the outline of a partial trade accord. As part of the deal, China will significantly step up purchases of U.S. agricultural commodities, while the U.S. will delay a tariff increase due this week. President Donald Trump said the deal was the first phase of a broader agreement.The following is a roundup of emerging-markets news and highlights for the week ending Oct. 13.Read here our emerging-market weekly preview, and listen to our weekly podcast here.Highlights:The U.S. and China reached a partial agreement Friday that includes certain intellectual-property measures and concessions related to financial services and currency, Trump saidThe world’s two biggest economies had resumed talks aimed at easing hostilities in their 18-month trade war on Thursday, with both sides signaling cautious optimismWhile the limited agreement may resolve some short-term issues, several of the thorniest disputes remain outstanding; new U.S. levies on Chinese goods scheduled for December haven’t yet been called offChina’s trade practices have deteriorated and U.S. tariffs are forcing China to heed American grievances, U.S. Secretary of Commerce Wilbur Ross saidRead: U.S.-China Trade War Timeline: What’s Happened Since May 2019China is prepared to set a timetable for working out harder issues next year in trade talks with the U.S., Fox Business reported, citing the Chinese Commerce MinistryThe Trump administration placed eight Chinese technology companies on a blacklistThe government is also slapping visa bans on Chinese officials linked to the mass detention of Muslims in Xinjiang provinceThe administration is moving ahead with discussions on possible restrictions on portfolio flows into ChinaThe White House said Trump and his administration won’t participate in the House impeachment inquiry in a scathing letter to Speaker Nancy Pelosi, calling the proceedings unconstitutional and invalidNorth Korea’s nuclear envoy Kim Myong Gil said that the U.S. had arrived “empty-handed” for the talks in Stockholm over the weekendTurkish troops began a major incursion into Syria late Wednesday, hours after President Recep Tayyip Erdogan formally announced the beginning of a military offensive into the northeastern part of the neighboring countryTrump gave his administration authority to impose new sanctions on Turkey but isn’t moving ahead with them yet, Treasury Secretary Steven Mnuchin saidErdogan threatened to send millions of Syrian refugees settled in Turkey to Europe, as he bridled at criticism of his military offensive against Kurdish fightersInvestors are losing faith in exchange-traded funds that target emerging markets. After yanking another $768 million from U.S.-listed stock and bond funds in the week through Oct. 4, this year’s net inflows now stand at just $85 million -- a fraction of the $18 billion as of MarchAsia:The World Bank cut its developing East Asia and Pacific 2020 GDP forecast to 5.7% from 6% in its latest World Bank East Asia and Pacific Economic updateThe World Bank trimmed India’s economic growth forecast by the most among South Asian nations. India’s gross domestic product growth is projected at 6% in the fiscal year started on April 1, compared with 7.5% forecast in April and 6.8% recorded a year earlierChina’s hidden capital flight surged to a record high in the first half of this year, suggesting that residents wanting to move money abroad are using unrecorded transactions to evade tight capital controlsBank of Korea said it will use monetary policy to support an economic recovery as growth slows and inflation pressures weaken more than expectedBank of Korea Governor Lee Ju-yeol is sounding less optimistic about the economyThe central government’s debt rose 5.7 trillion won ($4.8 billion) to 697.9 trillion won as of end-August from July, according to a statement from the finance ministryTwenty North Korean fishermen were tipped into the sea after their boat collided with a Japanese Fisheries Agency vessel in waters off Japan’s west coast, public broadcaster NHK said. All 60 North Koreans on a boat suspected of illegally fishing in Japanese waters have been rescued, the Coast Guard said TuesdayIndonesia’s foreign reserves declined in September for the first time in four months to $124.3 billionSingapore Prime Minister Lee Hsien Loong and Indonesian President Joko Widodo agreed that the Monetary Authority of Singapore and Bank Indonesia would work to renew for another year their bilateral financial arrangement to support monetary and financial stability, which expires Nov. 4Indonesia’s Security Minister Wiranto was attacked by a knife-wielding man with suspected links to the Islamic State terrorist group, the police saidThailand will relax capital-flow rules to make it easier to move money abroad, the central bank governor saidThe central bank’s monetary policy committee remains concerned about the baht’s appreciation, according to the minutes of Sept. 25 meetingThe Bank of Thailand has limited scope to tackle the baht’s strength, which is a sign of investor confidence in the country’s economic fundamentals, according to the World BankThe central bank wants to preserve policy room amid rising risks and will use it when it’s really necessary, Deputy Governor Mathee Supapongse saidInternational Monetary Fund expects Thailand’s economic growth to slow to 2.9% in 2019 and 3.0% in 2020 from preliminary 4.1% growth in 2018Malaysia is asking the brother of ex-premier Najib Razak and former cabinet ministers to return funds believed to have come from 1MDB or risk being prosecutedNation is widening its deficit target for 2020 to 3.2% of GDP from 3% previouslyTaiwan’s exports unexpectedly decreased in September, down 4.6% year-on-year compared with median analyst estimate for a 0.8% gainThe Philippines central bank has probably finished cutting its key interest rate this year, but could still ease monetary policy by lowering the amount of funds banks must hold in reserve, Governor Benjamin Diokno saidThe nation posted a trade deficit in August of $2.4 billion, compared with the $3.6 billion median estimate of analysts and a shortfall of $3.4 billion the previous monthEMEA:Africa could be home to 90% of the world’s poor by 2030 as governments across the continent have little fiscal space to invest in poverty-reduction programs and economic growth remains sluggish, the World Bank saidThe bank cut its growth forecast for South Africa in 2019 to 0.8%, from a 1.1% estimate in JuneSouth African business confidence increased from the lowest level in more than three decades in September and may continue to rise if the nation’s upcoming medium-term budget sets the stage for an economic recoveryThe nation’s foreign-exchange reserves surged to the highest level in almost four decades in September following the government’s biggest Eurobond issuance yet. Gross reserves rose to $54.86 billion from $49.95 billion in AugustThe National Treasury published proposed conditions for funds to bail out Eskom Holdings SOC Ltd., including that it publish separate financial statements for its generation, distribution and transmission unitsNigerian President Muhammadu Buhari has raised the country’s revenue goals for next year even after repeatedly missing past targets by a wide marginAn elite Mozambican police unit was implicated in the assassination of a key observer in a ruling party stronghold as the country prepares for general elections on Oct. 15Egypt’s annual inflation rate in urban areas fell to its lowest in almost seven years, offering a fresh incentive to investors in local debt looking to maximize returns that are already among the highest in the worldRussia’s ruble will erase nearly all of this year’s gains in the next three months as a strengthening dollar batters emerging-market currencies, according to the most accurate forecasterPoland’s ruling nationalists are headed for another four years in power, winning Sunday’s election on a vow to build a modern welfare state and complete a drive to impose their ideology on all walks of lifePolish lenders have threatened to fight back and sue their clients if local courts start annulling mortgage loan agreements after the European Union’s top court dealt a blow to the country’s financial industryHungarian Prime Minister Viktor Orban’s party lost control of Budapest and four of the country’s biggest cities, in a major rebuke to his rule after a video of one of his allies at an orgy handed a last-minute gift to a galvanized oppositionRomania is facing the prospect of losing a third prime minister in as many years. The Social Democrat government is on the brink of collapse after its opponents filed a no-confidence motionLebanese officials were in the United Arab Emirates seeking financial support to help keep the country afloat as it seeks to take painful austerity measures to restore investor confidenceIsrael’s central bank signaled interest rates could fall below zero to help steer the economy through a global trade war and boost sluggish inflation. The shekel extended lossesSingapore’s Temasek Holdings Pte has decided against investing in Saudi Aramco’s initial public offering, in part over environmental concerns, according to people familiar with the matterIran said missiles struck one of its tankers in the Red Sea, the latest in a series of attacks on oil infrastructure in the region that have roiled energy marketsLatin America:Ecuador’s government is offering to increase welfare payments in talks with unions and indigenous groups aimed at ending the violent protests roiling the nationThe government returned to the capital after moving to the port city of Guayaquil amid mass unrest triggered by a decision to end fuel subsidiesBonds tumbled after government decided to move, before partially recovering lossesBrazil’s consumer prices unexpectedly fell in September as food and beverage costs tumbled for the second straight month, solidifying wagers the central bank will extend key interest rate cutsRetail sales rose less than analysts forecast in August in a fresh sign that consumer demand is responding slowly to record-low borrowing costsThe U.S. government has declined to endorse Brazil’s bid to join the Organization for Economic Cooperation and Development, marking a reversal after months of public support from top officialsBrazil is about to sell a series of exploration licenses in the Atlantic Ocean that comprise more oil than the entire reserves of NorwayLower house floor approved the system for sharing out the funds from the oil auctions among states and municipalitiesMexico’s inflation rate fell to the central bank’s target for the first time since 2016 as a slowing economy and somewhat stable peso have led economists to forecast more interest rate cutsTwo members of the central bank voted for a 50bp rate cut, according to the minutes of the last meetingA group of House Democrats said U.S. approval of the stalled USMCA agreement hinges on Mexico’s full implementation of a new labor lawArgentine presidential candidate Alberto Fernandez said he wants to reprofile the nation’s debt, mirroring what Uruguay did in 2003Fernandez also said that if elected, his government would abandon the Lima Group of nations that meets to demand fresh presidential elections in VenezuelaGovernment will transfer funds to compensate provincial pension funds, even if provinces haven’t provided the required informationChile’s inflation unexpectedly slowed in September on the back of falling transportation and household goods prices, paving the way for another interest rate cut this monthEconomists see policy makers cutting the monetary policy rate by 25bps in its October meeting, according latest analyst survey released by the central bankVenezuelan opposition lawmakers proposed changes to the hydrocarbon law, allowing for international companies to control oil and products trading\--With assistance from Colleen Goko, Selcuk Gokoluk and Philip Sanders.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at firstname.lastname@example.org;Netty Ismail in Dubai at email@example.com;Aline Oyamada in Sao Paulo at firstname.lastname@example.orgTo contact the editors responsible for this story: Tomoko Yamazaki at email@example.com, Alex NicholsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
On Thursday, Barclays CEO Jes Staley called pressure on the stock “deeply frustrating,” citing three causes for its poor performance: Brexit, low interest rates, and lingering regulatory measures that stemmed from the financial crisis.
(Bloomberg Opinion) -- Before the financial crisis, the term “high-yield savings account” would have been considered an oxymoron.Today, such products are thriving. After the Federal Reserve dropped its benchmark lending rate to near-zero in late 2008, big U.S. banks paid virtually nothing to anyone who parked money with them. That presented an opportunity for new, mostly online entrants to swoop in and offer much more. After years of getting zero, customers viewed a 2% interest rate with backing from the Federal Deposit Insurance Corp. as a bonafide steal.Their popularity only grew as the Fed raised interest rates. Even Goldman Sachs Group Inc. got into the game in 2016 with its consumer bank under the brand Marcus. Higher yields fueled the online cottage industry that tracked the best interest rates available each month. A quick search of “best savings account” includes articles updated monthly from NerdWallet, Bankrate, the Balance, SmartAsset and LendingTree’s MagnifyMoney, among others. Fast-forward to the present. With the Fed having cut interest rates twice since the end of July, and possibly lowering them again this month, it’s hardly surprising that these savings accounts have adjusted lower as well. Yet it’s almost comically difficult to find how the various savings rates have changed over time because the entire online ecosystem updates so frequently. One of my editors told me the rate on his Marcus account fell to 1.9% on Oct. 4, the third time that’s happened since he opened it in March. Fortunately, Greg McBride, chief financial analyst at Bankrate.com, sent over some historical data:Clearly, no two banks reacted to the change in Fed trajectory quite the same way. Goldman Sachs’s Marcus and Barclays Plc, for example, clearly anticipated interest-rate cuts and gradually lowered their savings rates ahead of the central bank’s announcements. Ally Financial Inc., by contrast, slashed its rate by 30 basis points in the week after the Fed’s July rate cut. Colorado Federal Savings has only had to drop its promised interest rate once since March because it remained comfortably below the fed funds rate. And then there’s HSBC Holdings Plc’s HSBC Direct, which stubbornly kept its rate elevated until this week, when it made a 25-basis-point reduction.At this point, regardless of the past several months, each bank is running out of room to maneuver after the Fed’s persistent rate cuts. Barclays, as of the most recent Bankrate data available, is offering just 2 basis points less than the upper bound of the fed funds target rate. Marcus was in a similar bind for a couple of weeks but swiftly lowered its rate by an additional 10 basis points. HSBC, for now, seems determined to offer higher rates than the competition, though by a shrinking margin.For those not steeped in financial markets and listening to every word from Fed speakers, it sure might seem like “high-yield savings accounts” aren’t living up to the hype. Round numbers might be purely psychological, but it’d be hard to fault people who balk at interest rates dropping below 2%. Nerdwallet’s Q&A section asks: “What do the best savings accounts look like?” Its answer: “The best savings account interest rates are close to 2.00% or higher.”Obviously, the terms of these savings accounts allow for changes to interest rates at any time. With 10-year Treasury yields at 1.66%, it’s simply not sustainable for banks, even those without brick-and-mortar locations, to offer the same payouts they once did. Some institutions that require high minimum opening balances still offer juicy rates, like 2.4% at Popular Inc.’s Popular Direct, but those seem destined to fall eventually.To be sure, it could be a lot worse for American savers. In Europe, a growing number of German banks are passing on the region’s negative interest rates to their customers as costs become too high to bear. Bigger lenders like Deutsche Bank AG and Commerzbank AG have signaled they’re warming to the idea as well.All of this serves as a backdrop for the Fed’s interest-rate decision on Oct. 30. Wall Street is convinced that after a wave of weak economic data, the Fed will lower rates yet again, even though Chair Jerome Powell has insisted the central bank is not on a preset course and minutes from the central bank’s September meeting revealed that policy makers are sharply divided about the path forward. While Chicago Fed President Charles Evans said he “wouldn’t mind another cut,” notable hawks Kansas City Fed President Esther George and Boston Fed President Eric Rosengren said further lowering the fed funds rate isn’t justified yet because consumer spending, which accounts for 70% of the U.S. economy, remains so strong.If the post-crisis era has taught markets and economists anything, it might just be that lower-for-longer interest rates don’t necessarily get people to raid their savings and spend. Rather, it might be just the opposite — without any hope of earning anything on what they save, consumers may decide to hoard additional cash for a rainy day or to meet their retirement goals. Since mid-2005, the U.S. personal savings rate as a percentage of disposable income has generally trended higher, to about 8% from as low as 2.2%, according to Commerce Department data.Given that U.S. consumers appear to be one of the few bright spots in an otherwise slowing global economy, the Fed should be careful not to make any moves that would slow their momentum. Certainly, one more quarter-point rate cut isn’t going to suddenly break Main Street. According to the latest data from the FDIC, retail deposits at the nine largest institutions increased by more than 2% from a year earlier, to $5.2 trillion, even though more than one-fourth of deposits pay no interest. In other words, many patrons of big banks have become accustomed to getting paid nothing on their checking or savings account balances.And yet, if enough savvy savers become convinced that the Fed will abandon its projections and drop interest rates at just about every meeting, it’s easy to envision a scenario in which money that would have gone into high-yield savings accounts instead gravitates toward fixed-rate bonds or certificates of deposit to lock in a reliable stream of income. That sets up an additional hurdle for those consumers to access their cash and spend to keep the economy afloat.Powell has long said that the central bank will act as appropriate to sustain the economic expansion. Lately, that’s meant cutting interest rates at every turn, to the delight of stock markets. But the Fed would do well to spare a thought for savers as well. It’s easier to spend when it’s clear how much interest your bank account will pay tomorrow.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Two senior Barclays bankers created a “misleading audit trail” to hide the fact that Qatari investors were being paid bigger fees for supporting a capital raising to keep the UK bank afloat at the height of the 2008 financial crisis, a London court heard. The two men, together with Tom Kalaris, Barclays’ former head of wealth, are accused of secretly paying the Qataris — Qatar Holding, an arm of the sovereign wealth fund, and Sheikh Hamad bin Jassim bin Jabr al-Thani, the Gulf state’s then prime minister — £322m extra in return for its investment in two emergency cash calls.
With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Barclays PLC (NYSE:BCS). Barclays PLC (NYSE:BCS) has seen an increase […]
(Bloomberg) -- Ex-Barclays Plc executives on trial for alleged fraud jokingly worried about the sex and food they would face if they ended up in jail over a plan to secure a cash injection from Qatar and avoid a U.K. government bailout at the height of the 2008 financial crisis.The comments were read to a London jury on Thursday, during the trial of Tom Kalaris, Richard Boath and Roger Jenkins, who are accused of illegally hiding commissions the bank paid Qatar from other investors.When the executives mulled how to package the fees, they settled on making them through a side deal, which they ran past Chief Executive Officer John Varley as well as Barclays’ lawyers, prosecutor Ed Brown said. During one of the conversations, Kalaris and Boath mused what might happen if they got it wrong and ended up in jail.“None of us wants to go to jail here,” Kalaris told Boath on a June 2008 phone call read to the jury.“It ain’t worth it and apparently the food sucks,” Boath replied.“The food sucks and the sex is worse,” Kalaris said.The charges, which all three men deny, relate to 322 million pounds ($395 million) in fees Barclays paid Qatar in commissions for two investments totaling 4 billion pounds. The trial is the most high-profile U.K. case against senior bankers for wrongdoing relating to the financial crisis. Varley was acquitted of similar charges in June.Kalaris, the head of the bank’s wealth unit, was the “quarterback” and “architect” of the team raising funds to allow the lender to get through the turbulence while Boath was tasked with scoping out the details of the transactions, Brown said. Jenkins, head of Middle Eastern banking, was the “gatekeeper” for investment discussions with Qatar and managed the relationship with the country, he said.Varley, former head of investment banking Bob Diamond, in-house lawyer Mark Harding and head of compliance Steve Morse signed off on the side agreement, which stipulated that the Qataris would provide services in exchange for extra fees, Brown cited Kalaris as saying. The other men haven’t been accused of any wrongdoing.“I don’t want to go to jail,” Kalaris told Boath, head of the financial institutions group in Europe, Middle East and Africa, relating a conversation he’d had with Harding about how to structure the payments. “So Mark, you’ve got to make sure you’re comfortable. He will have to vet this right beforehand.”Mounting PressureLeading up to the deal, discussions between the defendants, Diamond and Varley revealed Qatar was “playing hardball,” fueling the team’s desperation to get the funding, Brown, a prosecutor for the Serious Fraud Office, told the jury.“The necessity to secure investment from the Qataris was evident from a communication between Boath and his line manager, John Winter,” he said. He showed the jury an email where Boath said “Without 1 bn, at the very least, from Q we are basically dead,” with the Q standing for Qatar.Deals with three other strategic investors that Barclays identified, including Temasek, a Singaporean sovereign wealth fund, Sumitomo, a Japanese conglomerate, and the China Development Bank, relied on a deal with the Qataris, Brown said. As a lead investor, Qatar demanded an investment commission of 3.75%, more than double the standard 1.5%, Brown said.Varley signed off on a 3.5% commission for Qatar shortly after Boath told Barclays Asia head Robert Morrice that Qatar’s “got us by the balls because the price is so low,” Brown said. Boath had been referring to Barclays’s depressed share price. “We need to be less cute,” Boath continued. “Hurry up and pay the price. Just f--king make it happen.”Once the initial 1 billion-pound commitment was obtained from Qatar, Diamond expressed his delight in an email to Varley. “This is HUGE, so pumped!!!!” he said.Varley later told Chairman Marcus Agius that an investment had been secured, according to an email shown to the jury.“Took longer than I had hoped, but these people are the new cocks of the roost,” Varley said once a deal had been secured at 2 billion pounds.The desire to conceal the payments was driven not only by the fact that they were above market rates, but also because Barclays didn’t want to appear too desperate, Brown said. In one conversation relayed to the jury, Kalaris told Boath that the only way to do this was by having a “side deal,” which was entirely separate from the cash call, Brown added.“This necessity is what drove the conspiracy,” Brown said. “How to pay the Qataris what they wanted without disclosing the fact to others.”To contact the reporters on this story: Ellen Milligan in London at firstname.lastname@example.org;Franz Wild in London at email@example.comTo contact the editor responsible for this story: Anthony Aarons at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Former Barclays chief executives John Varley and Bob Diamond “appreciated” that the bank had to pay Qatari investors outsized fees to secure their participation, and that the extra commission could not be paid openly, a court has heard. Top bankers must have known that Qatari demands for twice the fees of other investors in an emergency fundraising constituted a payment for participation, said the prosecution at a landmark fraud trial in London. The case is centred on Barclays’ arrangements to raise funds from Qatar in 2008 to avoid UK government control.
Former Barclays finance director Chris Lucas would have been criminally charged over two emergency fundraisings launched by the bank at the height of the financial crisis if he were not too ill to stand trial, a London fraud trial heard on Wednesday. As a former bank director, Lucas, who stepped down in 2013 due to his health, arguably took direct responsibility for false representations in the bank's public documents about capital raisings in June and October 2008, a prosecutor for the UK Serious Fraud Office (SFO) alleged. The high-profile trial revolves around undisclosed payments to Qatar as Barclays raised more than 11 billion pounds from the Gulf state and other investors to avert a state bailout as markets roiled in the global credit crisis.
(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. Boris Johnson will meet Irish Prime Minister Leo Varadkar on Thursday as the U.K. and European Union seek a breakthrough in stalled talks to reach a Brexit deal. EU chief negotiator Michel Barnier warned the two sides are in no position to reach an accord, but said that with "goodwill" there’s still the possibility of doing so. Johnson said he is "cautiously optimistic.”Johnson has also scheduled an emergency sitting of Parliament for Oct. 19, the day after he returns from a summit of EU leaders in Brussels. The crisis session will give MPs the chance to debate the way forward. A rare Saturday session in the House of Commons, it’s set to be fraught as politicians weigh their options: delaying Brexit, crashing out with no deal, or trying to bring down the government.Key Developments:Johnson and Varadkar to Meet in northwest England on ThursdayParliament to sit on Saturday Oct. 19 after crunch EU summit. Parliament has only met four times on a Saturday since 1939.Brexit Secretary Stephen Barclay to hold talks with EU Chief Negotiator Michel Barnier on ThursdayBarnier: a deal is “very difficult, but possible”Johnson’s DUP allies reject mooted European compromise plan for Irish borderBrexit Talks Go On Hold as Leaders Focus on Pinning BlameJohnson Says He’s ‘Cautiously Optimistic’ (5:45 p.m.)Boris Johnson posted a campaign video on Twitter summing up his week so far, including announcements on hospitals and police, a reference to Extinction Rebellion protests in London and -- inevitably -- a reference to Brexit."We’ve been also negotiating with our friends and partners in the EU about Brexit,” Johnson said. “I’m still cautiously, cautiously optimistic."U.K. Banks to Help Companies With Brexit Loans (5:25 p.m.)U.K.’s banks signed up to a government-backed program designed to ensure small and medium-sized companies have access to the cash they need to prepare for Brexit.The government’s British Business Bank will make 1.3 billion pounds ($1.6 billion) available to lenders to enable them to help SMEs invest in capital, increase export capabilities and manage cash flow, the Business Department said in an emailed statement.The program was finalized at a meeting of the government’s Business Finance Council, co-chaired by Business Secretary Andrea Leadsom and Economic Secretary to the Treasury John Glen. Banks signed up include Barclays, HSBC, Royal Bank of Scotland, Lloyds and Santander.Johnson and Varadkar to Meet On Thursday (5:05 p.m.)The British and Irish leaders will meet over lunchtime on Thursday for what looks likely to be a make-or-break conversation for the chances of getting a Brexit deal by the Oct. 31 deadline. Boris Johnson is hosting Leo Varadkar in northwestern England for the private talks, along with members of their senior teams, according to statements released by both sides."This will be a private meeting to allow both leaders and their teams to have detailed discussions about the process for securing agreement for a Brexit deal," the Irish government said in a statement.Barnier Aims For Moral High Ground (4:50 p.m.)The EU’s chief Brexit negotiator distanced himself from some of the more inflammatory rhetoric that emerged on Tuesday, saying the bloc would remain “calm, vigilant, constructive and respectful of the United Kingdom and those who govern it.”Michel Barnier told European lawmakers that while the two sides were still far apart, there was the possibility of an agreement -- as long as there’s “goodwill.” But, with negotiations at an impasse, he didn’t show any sign that the EU is ready to give ground.He spelled out some of the more serious issues of disagreement, describing Brexit as “something that’s long-term” and “creating specific serious problems, first and foremost for Ireland.”The biggest area of dispute relates to customs arrangements on the Irish border. Barnier rejected the U.K.’s bid to work those out during a post-Brexit transition period because if that didn’t end up happening it would lead to “no checks whatsoever,” which would damage the EU’s single market.He also criticized the U.K.’s plan to give the Northern Ireland assembly a veto over the deal and the government’s request to remove the so-called level playing field commitments, agreed by Johnson’s predecessor Theresa May -- which would prevent the U.K. undercutting the EU on issues such as taxation, environmental standards and social protection. That was about “a basic sense of fairness and loyalty,” he said.Barnier: No Position at Moment to Get Brexit Deal ( 4:15 p.m.)EU chief Brexit negotiator Michel Barnier told the European Parliament that “time is pressing” to get a Brexit deal, but the sides aren’t in a position to reach an agreement yet.Among disagreements is the issue of customs checks on the Irish border, he says. “We need to have proper rigorous checks all along our external border,” he said.EU’s Juncker Says Don’t Blame EU (4:00 p.m.)EU Commission President Jean-Claude Juncker says he doesn’t “exclude a deal” on Brexit.“We are not accepting this blame game which started in London -- we are not to be blamed,” he told the European Parliament in Brussels.Ireland Holds Out For Brexit Solution (2 p.m.)Ireland needs a solution to the border with Northern Ireland that “can be sustained into the future” after Brexit, Finance Minister Paschal Donohoe said in a Bloomberg TV interview in Dublin. Ireland still requires a deal that preserves “the principles behind the backstop,” he said.Any proposal to seek the consent of Northern Ireland tied must “respect the role” of the two communities of Northern Ireland, Donohoe added. The U.K. plan in its current form could give an effective veto to just one political party in the region.Merkel Not Breaking Code of Silence (1:30 p.m.)Angela Merkel’s chief spokesman, Steffen Seibert, kept getting pressed about the now-famous morning phone call. The U.K. side have given their take on it but Germans are not, but one can try and read between the lines.Here is what he said to reporters in Berlin:“We have no new position on Brexit, neither the chancellor nor the government. This is what we’ve always said. The government will work to find a solution until the last possible moment, so that we can have an orderly U.K. exit out of the EU and avoid the scenario of a no-deal or disorderly exit, because that is the worst-case scenario for all involved.”Asked more pointedly whether the chancellor said what the British press (or Downing Street) said she said: “A private conversation is a private conversation.” He went on to say, again, that Germany’s position hasn’t changed.Barnier: Deal Is ‘Difficult But Possible’ (12:15 p.m.)Michel Barnier, the EU’s chief Brexit negotiator, said a deal with the U.K. is “very difficult but possible” as he prepared to meet with Brexit Secretary Stephen Barclay on Thursday.“The EU will remain calm, vigilant, respectful and constructive. The technical talks continue and I’m invited for working lunch with Steve Barclay tomorrow,” Barnier told reporters on Wednesday. “I think a deal is possible, very difficult but possible.”Irish Backstop Can’t Have time limit, EU Says (12 p.m.)EU Budget Commissioner Guenther Oettinger said he and his European Commission colleagues had discussed Brexit and all agreed the latest British proposal was inadequate. The Irish backstop can’t have a time limit, Oettinger told reporters in Brussels.Boris Johnson Has a Plan B for Brexit If the EU Rejects His DealReported EU Plan Non-Runner, DUP Says (11:35 a.m.)The DUP moved quickly to kill off a reported move by the EU to break the deadlock by giving the Northern Ireland Assembly a say over how long EU customs rules last (see 11:20 a.m.). Brexit spokesman Sammy Wilson said this would allow Sinn Fein keep the region bound to the EU indefinitely.“This is worse than Mrs May’s deal, which at least contained the pretense of these arrangements only being used as an insurance policy,” he said in a statement. “This proposal confirms the intended permanency of keeping Northern Ireland in the EU and removing us from the United Kingdom.”Scottish Court Delays Decision on Extension (11:25 a.m.)Scottish judges held off intervening in the Brexit furor by postponing a decision on whether they need to commit to sending a letter requesting an extension, giving Boris Johnson a temporary legal victory.The judges ruled that Johnson hadn’t acted unlawfully but left the door open to a new case if he fails to reach a deal with the EU and refuses to request an extension by Oct. 19, as he would be required to by law. Under a power peculiar to Scottish law, known as nobile officium, Scottish courts can intervene in any way they see fit to fix an outcome.At the hearing in Edinburgh, Johnson’s lawyers promised he will obey the law and request an extension from the EU, while also arguing that there’s nothing to stop the prime minister continuing to say he intends to leave on Oct. 31.Potential Backstop Offer Floated (11:20 a.m.)The EU may be willing to make a major concession to Boris Johnson over the Irish border by giving the Northern Ireland Assembly a say over how long EU customs rules last in the province, the Times newspaper reported.In an attempt to break the deadlock, the bloc is dangling the prospect of the assembly in Belfast being able to pull Northern Ireland out of the so-called backstop mechanism, aimed at preventing a hard Irish border, but it would need to vote at some point after a few years with a double majority, an EU official said.This would mean it would need to be approved by both nationalist and unionist politicians, something that was immediately rejected by Sammy Wilson, Brexit spokesman for the DUP. Sinn Fein also appeared to reject the idea.It would also need Johnson to agree to keep Northern Ireland in the EU’s customs union until then, and possibly forever, something he’s said he’s not willing to do.The idea is not an official EU position and would need the approval of the Irish government, but officials say it is seen as a potential compromise and that has been made clear to U.K. negotiators. Bloomberg reported last week that the EU was considering offering to time-limit the backstop linked to the assembly’s consent.Barclay and Barnier to Meet on Thursday (11 a.m.)Brexit Secretary Stephen Barclay will travel to Brussels for talks with European Union chief negotiator Michel Barnier on Thursday.The meeting is being seen as a stock-take, rather than an indication of a breakthrough -- or breakdown -- in negotiations, according to British officials.Parliament Set For Emergency Saturday Sitting (Earlier)MPs will sit in emergency session in London on Saturday Oct. 19, just 12 days before Britain is set to leave the EU, the day after a crunch summit of EU leaders in Brussels.If Boris Johnson strikes a deal with the EU, it will be a chance for politicians to vote on it, but if he doesn’t, it could also present an opportunity for the premier to ask Parliament to sanction a no-deal Brexit.Parliament has already passed a law requiring Johnson to ask for an extension to negotiations if no deal is reached by Oct. 19, but he could use the debate as an opportunity to set out ways he plans to get around the so-called Benn Act and deliver on his promise leave the EU on Oct. 31.It will be the first time the House of Commons has met at a weekend since 1982, when MPs debated the Falklands War.Denmark Increases Support for SMEs (Earlier)Just two days after Boris Johnson called Danish Prime Minister Mette Frederiksen to discuss Brexit, the Business Ministry in Copenhagen announced it is spending an extra 50 million kroner ($7.4 million) to help the country’s small and medium-sized companies deal with the fallout from the U.K.’s departure from the EU.“A no-deal Brexit continues to be a high-risk scenario and that’s why we need to step up preparations,” Business Minister Simon Kollerup told reporters. “Denmark will be hit really hard by a no-deal Brexit, especially if we are not prepared enough.”Earlier:Brexit Talks Go On Hold as Leaders Focus on Pinning BlameBanks Warned Over Failure to Move Employees in Time for BrexitBOE Warns U.K. May Face Economic Turmoil in No-Deal Brexit\--With assistance from Morten Buttler, Kitty Donaldson, Patrick Donahue, Anna Edwards, Jonathan Stearns, Rodney Jefferson and Dara Doyle.To contact the reporters on this story: Tim Ross in London at email@example.com;Ian Wishart in Brussels at firstname.lastname@example.org;Alex Morales in London at email@example.comTo contact the editors responsible for this story: Tim Ross at firstname.lastname@example.org, Thomas PennyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The ex-finance director of Barclays would have been criminally charged with fraud over the bank’s two emergency fundraisings from Qatar during the 2008 financial crisis had he not been too ill to stand trial, a London court heard on Wednesday. A high-profile fraud trial of three former Barclays bankers heard prosecutors outline the alleged role of Chris Lucas, ex-finance director, who “took explicit responsibility” for the content of each capital raising prospectus and “may be regarded as directly making a false representation” in public documents underpinning the cash calls.