A senior executive at Barclays has alleged money laundering and mis-selling failures at the bank’s French operations, casting a shadow over the British group’s plan to sell its business in France to a private equity group, reports The Financial Times.
The Financial Times has seen a letter dated April 5th from Philippe Hébert, chief risk officer of Barclays France, to Tony Blanco, chief executive of Barclays France, alleging serious shortfalls in the bank’s standards of controls, compliance and conduct.
Mr Hébert says: “I am following up the message I sent you on March 3th, regarding serious mismanagement at cashier level and the particularly poor handling of this situation by the various control services and lines of defence, even though it carries serious risks of money laundering, especially at branches already known to be at risk (such as Biarritz).”
The letter cites several cases of suspicious activity that Mr Hébert claims the bank has failed to take seriously enough. These include unusually high levels of repeated, large cash withdrawals by customers of just below the 10,000-euro limit at its Biarritz branch — on 38 occasions by one client — and the detention of staff in its Nantes branch by police on suspicion of money laundering.
Mr Hébert said elderly customers of Barclays France had regularly been mis-sold expensive products. He gives the example of a 97-year-old who was advised to put all his money into one of its Spirimmo life insurance products charging a 6 per cent annual fee. The bank paid 60,000 euros to settle a complaint by the client’s son, but no disciplinary action was taken against the staff responsible, Mr Hébert said.
The allegations are a blow to Barclays, which said last week it had entered exclusive talks to sell its French retail, wealth management and life insurance business to AnaCap Financial Partners, a UK-based private equity investor. The price to be paid for the operations, which includes 74 branches and about 1,000 staff, was not disclosed.
Mr Hébert’s warning about failings in its French operations came less than five months after Barclays was hit with a £72-million record fine from the UK’s Financial Conduct Authority for lax anti-money-laundering controls around ultra-wealthy Qatari clients.
Barclays said in a statement: “We were already aware of these allegations. We are satisfied that the concerns were already identified and under investigation and action being taken in accordance with our standard processes. All relevant parties are aware.”