Barclays probed by US over Saudi banking licence



Barclays (LSE: BARC.L - news) is under investigation by US authorities into whether it made improper payments to secure a banking licence in Saudi Arabia, according to reports.

Officials at the Department of Justice are examining how the UK bank got a licence to run investment banking and wealth management operations in the Gulf country in 2009, the Financial Times reported on Friday night.

Barclays disclosed last week that it is co-operating with an investigation by the DoJ and the Securities and Exchange Commission into whether it breached the Foreign Corrupt Practices Act (FCPA). The FCPA gives US authorities powers to levy heavy fines and potentially prosecute individuals if corruption has been perpetrated by a company with strong ties to the US.

The bank is already facing an investigation by the Serious Fraud Office in the UK into the fees it paid in 2008 to Qatar's sovereign wealth fund as it raised capital at the height of the financial crisis. Last week's disclosure of the probe by US authorities overshadowed the first set of results from Anthony Jenkins, the new chief executive of Barclays.

Mr Jenkins replaced Bob Diamond, who quit after Barclays paid £290m to settle allegations some of its traders tried to manipulate the interest rate libor. Analysts have warned that the potential costs of the ongoing investigations Barclays faces is a shadow over the bank's share price. The bank reported a pre-tax loss of 47m pounds last quarter after taking setting aside 700m pounds to compensate customers who were mis-sold payment protection insurance.

Barclays shares closed down 2.7pc to 230.5p in London.

Barclays declined to comment. The Department of Justice could not be reached for comment.