BBC BLOGS - Peston's Picks
« Previous | Main | Next »

Lloyds to convert?

Robert Peston | 14:47 UK time, Monday, 26 January 2009

It's slightly odd that the penny should at last have dropped for investors - that if Barclays says it's profitable and doesn't need to raise new capital, then that's to be believed.

For a bank to have to give this reassurance in the form of an open letter from the chairman and chief executive is highly unusual. And the message they delivered wasn't new.

The bank has been shouting that it's in reasonable nick for 10 days, ever since the steep slide in its share price began.

Only belatedly have investors realised that Barclays could not make such confident statements without the approval of its auditors and also that of the City watchdog, the Financial Services Authority - and that surely they can't all be wrong.

Lloyds logoWhat's good for Barclays' share price has also had a more modest positive effect on shares in Lloyds.

As for Lloyds, I'm hearing that it may yet follow the lead of Royal Bank of Scotland by converting £4bn of preference shares held by the government into ordinary shares.

That would save it just under £500m a year in dividend payments, but would see taxpayers' stake in Lloyds rise to well over 50%.

Lloyds has been signalling that it does not want to be nationalised to that extent. If it's so desperate to prevent public ownership going through the 50% threshold, it could try to persuade UK Financial Investments, which holds the investment on behalf of the Treasury, that the new shares should not carry any votes.

Comments

Page 1 of 2

  • Comment number 1.

    Yes, this week could be a turning-point for Barclays.

    They their reasons - understandable if not indisputable - for resisting government money the first time around, and those reasons may persist awhile longer.

  • Comment number 2.

    As a Lloyds shareholder, would the company be in better nick without the HBOS add-on?

  • Comment number 3.

    If, like me, you fee that reading Robert Peston's blog is sometimes akin to reading Government pre-leaks and propaganda (my opinion - not necessarily fact), try turning to the BBC's other Economics Editor's blog (Paul Mason who is the BBC's Newsnight Economics Editor).

    That BBC blog seems to me to be real journalism, and capture much of the real mood and circumstances of the economy nowadays. He tells it straight.

    Just search for 'Paul Mason blog' in Google, or in the BBC search bar.

  • Comment number 4.

    If the banks are, after all, in reasonably good nick then why are they no doing what the Government is asking of them and lending to all and sundry?

    Could it be that things have now reached the stage that, for all the injections of cash and all the guarantees things are looking so bleak that they're just not up for it?

    If so, then you have to ask whether all that Government (ie our) money might have been better spent helping out the victims of the credit boom - rather than the perpetrators.

  • Comment number 5.

    Or it could ask UK Financial Investments to have a non-interference policy unless it is to vote out any directors who act irresponsibly with tax payers money.

  • Comment number 6.

    tell them to sod off then, a get the bank for zip!

    Cheeky buggers!!!

  • Comment number 7.

    Would someone be kind enough to explain why my 50,000 GBP Savings would be better off in a de facto nationalised RBS or Lloyds TSB (or whatever name it becomes) compared to the independent and privatised Barclays Bank?

    Likewise, if my salary were to be paid into Lloyds or RBS is it safe or should I transfer to Barclays?

    Or, is this all really all about that the only people who are crying crocodile tears about whether Lloyds TSB or RBS is "owned by the tax-payers" are their Bankers who can see their Bonuses for next year being somewhat constrained unless they can either do a deal with "UK Financial Investments" to not enforce the voting rights if the shares are converted to ordinary shares. Compared to Barclays who are fighting tooth and nail to ensure the FAS, their investors, their customers, the general public and the Government agree for their bank to stay in private hands and ensure their annual bonuses remain massive.

  • Comment number 8.

    Robert,

    I think there's a better way of getting what every one wants here. The problem we have here is that if Lloyds converts the prefs to ords and, by extension, the government owns the ords, then it has majority ownership of the company.

    The solution is to find a way of making ownership of the ords attractive to other (private sector) shareholders.

    What is to stop Treasury from guaranteeing such shareholders against loss of value of the shares for some period ot time? 3 years? 5 years? Basically the shareholder would be guaranteed not to lose money versus the price paid for the converted prefs for the agreed period, provided they hold the stock. Lloyds gets rid of its burdensome prefs that currently encorage it to shrink its asset base and capital requirement, and it avoids being majority owned by the governement.

    In the above scenario, there would be nothing to stop the shareholder selling the shares. If they are above the guarantee price, the shareholder keeps the profit. If below (and sold within the guarantee period), the shareholder also suffers the loss, and the guarantee passes to the new shareholder. Throughout the period, the guaranteed price is fixed. So, let's say Lloyds converts at 50 pence/share. The shareholder with the guarantee sells at 60 pence. They keep the 10 pence profit. Somebody will buy the shares at 60 pence, and they will be still have a guaratee against loss, but at the 50 pence level not 60 pence.

    If there are matters of particular embarrasment to the government, eg directors remuneration, acquisitions etc, then the guarantee agreement with the private sector shareholders could include provision for assigning the voting rights on these to the Treasury (or the hodling company for these investments that it has set up). The main issue, though, is thst Treasury is further reomoved from day-to-day operations of Lloyds under an arrangement such as this.

  • Comment number 9.

    So what you are saying that the investors are as clueless as the bankers or is it just a case of the short sellers striking again?

  • Comment number 10.

    I disagree completely with your opening presumption. Why should it be strange that investors find it difficult to believe the chairman and CEO of Barclays? Collectively, the banks on both sides of the Atlantic have spent the past 18 months fudging the issue of how bad things are on their books. Hence the demise of Citi, Bank of America, RBS, HBOS, etc. So why should any investor suddently think that the Barclays crowd are telling the truth. This is the problem Robert. Some investors simply don't believe bankers anymore, whatever they have to say. Equally, given the Arthur Anderson/Enron fiasco, what makes you so sure that all auditors are to be believed? Who was auditing the banks over the past three years? It may not be fair, but I've reached the stage where the government, banks and auditors plus financial regulators are a bunch of idiots who are all driving the UK to bankruptcy. Iceland - you are not alone!

  • Comment number 11.

    As a Lloyds shareholder the fact that the Chairman of Lloyds is a friend of G Brown is no reason to wreck shareholder value by taking on the basket case of HBOS. Eric Daniels kept well away from the excesses of sub prime then promptly dumps a totally unknown debt machine on us. I have lost 95% of my share value with only further disasters ahead.
    Taking on Northern Rock quickly was probably feasable but HBOS is a shipwreck and Mr Hornby still seems to be employed. Why? The next shareholder meeting should be very unpleasant the CEO.
    Had Daniels stayed away he could no doubt have picked up bits of HBOS and RBS if it wanted at knockdown prices but only when it knew the facts. These people should be sacked with no pay off.

  • Comment number 12.

    As far as Barclays was concerned share prices fell because of the lack of confidence at the twin shock announcements by this government of having to refinance the banks (plural) and the reintroduction of short selling both at the same time.

    A PR disaster. Someone should be sacked for that.

    The merger of Lloyds and HBOS is highly regrettable for the longterm as bad debts of both commercial and domestic mortgages of the Halifax could eventually push them down the same route as RBS.

    It would have been much more beneficial to have at least two independent Banks.

    Then they could have cherry picked the good business and left the rest for the government to sort out.

  • Comment number 13.

    "As for Lloyds, I'm hearing that it may yet follow the lead of Royal Bank of Scotland by converting £4bn of preference shares held by the government into ordinary shares."

    So Robert, How come Victor Blanc wrote to all Lloyds shareholders only last Friday saying it was their clear intention to redeem the preference shares in 2009? Are we to believe him or you?

  • Comment number 14.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 15.

    Banking relies on confidence. Therefore a bank is fine provided everyone believes it is fine. If they do not take this view then it becomes a self-fulfilling prophecy that the bank will need bailing out.

    The expressions of sound liquidity have become rather like the appeals of people for missing relatives on TV. Most often it turns out that they are the villains.

    Haven't we had just such confident statements from other banks recently, just shortly before they went to the wall?

    A good test of the banks' value is what you would pay for the shares if they were not limited companies - ie if the shareholders were liable for all the company's debts.

    How much would you pay to be a shareholder, or rather how much would they have to pay you to become one. For myself I would not take the shares at any price if they were offered, and nor should the taxpayer.

  • Comment number 16.

    This is another excellent article, Robert!

    Is 'nationalising' an empty word though, I wonder, when it's about ensuring shareholders' income?

    How many taxpayers (and if so, which ones?) benefit from any equity in UKFI, whether it originates from Lloyds, Barclays or Northern Rock?

    What if every British citizen became a shareholder in UK plc instead? Then shareholder values might have some 'national' meaning at least!

    Yours with continued admiration for putting the finger on the debt-buttons,

    Sabine
    Organiser, Forum for Stable Currencies

  • Comment number 17.

    As you say, Robert the penny has finally dropped....

    Is this day when we see the return of listening to the facts rather than hysteria ?

    I hope so

    All we need now is for GB and AD to avoid messing things up with yet another announcement. The government should keep quiet

    Here's to the future.....

  • Comment number 18.

    As a member of Barclays Staff, can I just say it's great that the wider Financial world has woken up to the fact that we are actually doing ok - I can also say that I have profited from the slump in share prices, as a humble branch cashier, I removed my £500 savings from a well known Building Society on Thursday and bought Barclays shares at £0.48p on Friday, I've already almost doubled my money - makes up for the lack of bonus or payrise this year and also continues to show faith in the company I work for!

  • Comment number 19.

    I'm glad I dumped my bank shares

  • Comment number 20.

    I'm sorry to say I would not trust anything said by the regulators or current crop of Bank Directors.

    Two days before Bradford and Bingley were Nationalized its Directors were saying it was fully funded well into next year.

    Shares at the moment are too dodgy for ordinary folk.

    Barmy bounce under way in the good old US of A.

    But how long will that last ?

    Until a new wave of Investors have been fleeced and then it will be doom and gloom in the news again !

  • Comment number 21.

    Finally the penny is dropping!

    Lemmings we go up now!

  • Comment number 22.

    And the Housebuilders haven't started failing yet.

    Bearing in mind higher unemployment and falling salaries.

    Their debts will drag them under.

  • Comment number 23.

    At last. Some sense surrounding Barclays' share price. Given that they have confirmed they are not seeking further funds, either privately or from the state, what value would you place on their shares? I feel they would be fairly priced at a £3.20 ..... so currently a good buying opportunity....... if anyone's got any cash.

  • Comment number 24.

    A bank that seems to be solvent!!!!!!!!

    Someone catch it, stuff it and put it on display at the British Museum.......

    On 2nd thoughts it did need to raise 7 billion in panic funding (sorry Private Funding).......

    ........ never-the-less solvent and with a share price moving from 90% down on the same time last year to just 82% down, this is a success story nowadays ....

    PS - I'd be interested to know who within Barclays has written down 8 billlion - could they not be lent to the Gov to estmate the losses other Banks may have.....

  • Comment number 25.

    Investors, many American our trying to use the media to trade of the volatility they are injecting into the Barcalsys share price. The FSA should show better stewardship so that one of the best capitalised banks in the world being sabotaged by these so called investors. I would not be surprised if Barcap ends the year in the £3-4 range!

  • Comment number 26.

    Hopefully a bunch of shortsellers have been caught with their trousers down!!

    Just a shame Barclays won't to a Volkswagen!

  • Comment number 27.

    Oh well if the word of the Auditors and City Watchdog say Barclays are doing ok - oh please!!! This is a last ditch attempt to counteract the public demand to stop wasting taxpayers money on insurance which will effectively giving them carte blanche to take risks.

    If these banks are really doing OK, in accordance with the words of the Auditors and City Watchdog then lets cancel all bailout packages and use the money to save jobs and homes.

  • Comment number 28.

    "Only belatedly have investors realised that Barclays could not make such confident statements without the approval of its auditors and also that of the City watchdog, the Financial Services Authority - and that surely they can't all be wrong."

    Tongue firmly planted in in cheek I trust.

    We can rely on the fact that because Barclays has had no truck with any weapons of mass financial destruction that it can be confident in the value of its assets. Or can we? This onlooker was under the impression that a key problem is that banks do not know what toxic debt, or from their side of the books, toxic assets and toxic collateral are worth and we are not sure whether they hold them.

  • Comment number 29.

    Has the BBC made the moderators redundant but not told anyone?

  • Comment number 30.

    Were not Barclays involved in buying and selling of SIV's etc ?

    Are they not exposed to the Bond market ?

  • Comment number 31.

    is anyone on the moderation team working today?????

  • Comment number 32.

    "Barclays says it's profitable"

    Yep, we should believe everything the banks tell us.

  • Comment number 33.

    RP,

    it seems we have had a similar blog lately "don't blame the speculators, IMO lets do,it is not investor realising the true value of Barclays, the problems have been, and still is, speculation on short term price movements.

    More importantly though does it really make so much difference if Lloyds is 49% or 51% government owned?

    Surely the level of regulation and openess the banks should liable to, makes minor change in the % owned by the goverrment accademic?

  • Comment number 34.

    Now I don't know much about shares - but I was under the impression that both types of shares had pros and cons and that preference shares were non-voting but they paid a guaranteed dividend - so isn't Lloyds basically trying to pull a fast one by swapping non-voting shares which pay a dividend to non-voting shares that don't pay a dividend?

    So where exactly is the benefit to the government and the tax payer?

  • Comment number 35.

    Mr Peston re your comment

    Lloyds converting preference to ordinary.

    Considering the letter sent out by Lloyds at end of last week stating intention to buy back all preference shares during 2009 and resume dividends doesn't your comment smack at either sensationalism or even self aggrandisement by presuming to have great insider knowledge.

    It seems to me that "Off the cuff Throwaway remarks" such as this is one is part of the cause for shares being in a see saw situation. Let's have some consideration towards people such as me who are caught in a nightmare of a trap. I have puchased lloyds shares in bits and bobs since they were first privatised. The intention was a) Either to sell at 65yrs old and buy an annuity or b) Sell some and use divi to supplement pension. Standing on over 15,000 shares I cannot do anything but hang on in hopes. Your headlines continually give me the shivers and worries

  • Comment number 36.

    Unfortunately Mr Peston as a shareholder I was told by Fred that RBS was in reasonable nick and they wanted the rights issue to beef up their reserves. Would you believe a major bank CEO at this time? No they have broken the trust between the company officers and shareholders.

  • Comment number 37.

    Varley and Turner should put some collateral behind their statements. Then there could be no doubt. What about a personal guarantee of 1 million each against there being any solvency issues at the bank?

  • Comment number 38.

    one hour and fifty minutes and still no moderation.

    What is going on?

  • Comment number 39.

    In the words of that very well known advert perhaps it's now time to 'calm down dear'!

    Over the months I have watched with amazement and sometimes deep frustration at the sensationalist style of reporting which seems to have prevailed throughout this whole sorry financial saga.

    Maybe I'm just getting old, cynical and meldrewish but I expect a little more dignity and objectivity from the BBC.

  • Comment number 40.

    not putting any money on this - but I think the moderator may have walked out!

  • Comment number 41.

    If this open letter had not produced a significant bounce in the share price (as appeared might be the case at one point) then it would have been a statement that investors did not believe ANYTHING that the banks said. After all, Barclays couldn't be much more explicit than this. It would have shown a complete absence of trust and without some trust in the statements of companies, investment cannot really take place.

    Thank goodness therefore that there WAS a share bounce. Barclays had better deliver on everything they have promised though, or I think levels of trust in the city will reach new and frankly hideous lows!

    http://thedailycrazy.wordpress.com to give your views on which - if any - industries offer the UK a way out of the current recession.

  • Comment number 42.

    What is worrying about this article is that it simply confirms that much of of what goes on in the city and the information used by the people working there (in the stock markets and financial markets) is based largely on "chinese whispers" and these people have little or no proper knowledge understanding of how, in the real world, these businesses operate.

    In the case of Barclay's the traders and finacial insitutions should be questioned as to why they decided to mark down the share prices so aggresively and if their answers are questionable then they should lose their licence to operate.

  • Comment number 43.

    So, Barclays finally convinced the markets that they (perhaps only they!!) were better prepared for what is to come without so much government help/interference!

    An old adage . . . only the strong survive!

    Barclays have taken from Gordy what was to their advantage, and quietly told him to sod off with what was not!

    Perhaps we would all have been better of with the few survivors like Barclays and let the "sick, lame, lazy" like Lloyds and RBS join all the other "midland bankers" of history.

  • Comment number 44.

    Barclays up 66%
    Lloyds up 33%
    RBS up 20%

    the race is not for the swift but who can endure

  • Comment number 45.

    No. 3 Good point
    How surprising that today moderation takes so long

  • Comment number 46.

    3. BasaltRocky:

    "....... try turning to the BBC's other Economics Editor's blog (Paul Mason who is the BBC's Newsnight Economics Editor)".

    Agree absolutely - Paul Mason's bog is the best economics/business forum on the BBC by far, and his most recent piece was particularly excellent.

  • Comment number 47.

    are people who speculate against the pound no more than city traitors.

  • Comment number 48.

    At last some sense prevailing and the short sellers rumour mongering ignored, although they are still trying - note all the doubting comments posted after the article in The Times today.

    I hope they are well and truly burned as they have burned our pension funds and small shareholders, including all those now desparate people who through SAYE have their life savings in these banks' shares.

    I understand there are 3 million small shareholders in RBS, Lloyds and Barclays, a lot of voters Mr Brown, Darling and McFall of the looney left (to think I used to vote Labour).

    A big distinction between today's announcement and those of RBS, HBOS and BB before their rights issues is that then the management were trying to raise money and making reassuring comments which turned out to be unwarranted.

    Now auditors/advisers are very much more cautious and Barclays are not trying to con money out of shareholders-quite the opposite declaring they do not need new funds.

    Barclays' gross write downs are also comparable with RBS'.

    If Blank is seriously thinking of converting the prefs he better make the new shares non voting, otherwise his reputation will take a battering and confidence in Lloyds will drop.

    To destroy a bank's shareholder value (the original Lloyds) because of his friendship with Brown will put him on a similar footing as Goodwin in reputational stakes.

  • Comment number 49.

    Robert,

    tying up two news items.

    Do any of the Lords sit on boards of banks or financial institutions?

    Is it possible to discover if they laid down amendments on any of Crash's financial instruments of law?

    If so maybe Crash can blame them for the lax regulation that may have ultimately led to the meltdown of the banking system.

    Moderator's are on a go slow too.

  • Comment number 50.

    chriss-w wrote:


    If the banks are, after all, in reasonably good nick then why are they no doing what the Government is asking of them and lending to all and sundry?


    Because all and sundry won't be able to pay it back. Because lending to all and sundry is what got them and all of us into this mess in the first place. Because it is madness to lend against overvalued and depreciating collateral.

  • Comment number 51.

    Shouldn't be too difficult, given Sir Philip Hampton has a copious supply of hats. As Chairman of RBS, he only has to persuade himself, as Chairman of UK Financial Investments, to request the FSA not to get involved, in accordance with the provisions of the Hampton Report as enacted in the Regulatory Enforcement qnd Sanctions Act 2008. And then maybe he'll buy himself some nibbles from Sainsburys...
    WS Gilbert dreamed something not dissimilar up in the Mikado. Well, we've now got a crude idea who the Mikado and Second Trombone are, quite apart from Katisha and the Lord High Executioner...

  • Comment number 52.

    Why would the lloyds group wish to lose control of their destiny by taking this action ?

    They have already signalled an intention pre merger, to repay the preference shares as soon as possible.

    Why give up control of the company to the Government to save just 500m p.a. when they may be able to do this from their own resources at some stage in the not too distant future.

    Ignore any current debt issues/ concerns and the individual profit figures of both organisations amounted to about 12 billion. I am not suggesting that is what will be expected in the combined first few years of trading given the HBOS debt position but they have already estimated cost savings of 1.5 m through the merger over the next 2/3 years.

    Also there may be some bits of the enlarged group that do not fit in to the future working plans of the group they may have a value and can be sold in order to raise cash to repay those preference shares.

    Once again our esteemed journo has dragged out another banking story no doubt from his "sources". Wish he would leave banking topics alone for a while as he is developing into a one trick pony, but then again maybe his leaking sources are after all, to be found somewhere in the treasury.

    That may have an impact in the current judicial review over the Northern Rock shareholders. Read the transcript of the attempted defence by the Government and where those particular leaks, may or may not have come from. It begs many a question on the truth telling issue of the source of the leak at that time. I rather suspect it was not the "company" or their advisors as suggested by the Government counsel

  • Comment number 53.

    Well, TB did, didn't he?

    I actually had the RCs asking me for consultancy not long afterwards, how to avoid dawn raids. I couldn't help being bemused at the thought there was the worlds' oldest organisation after that kind of help...and whether there was insider dealing going on - and when to expect the Spanish Inquisition.

  • Comment number 54.

    I notice that manufacturing industry does not seem to be getting the same priority help from the Government (taxpayer) as the banks did. I think we'd all agree that the unsustainable 'bubble' created by banks and their like is at the base of all the trouble the British economy is now in. I don't see how we are going to get out of the current 'bust' without supporting manufacturing industry and forgetting the very much discredited idea that the British economy could exist with just financial services and the 'service economy'. I for one would rather give money to support real industry, instead of the fake economy created by the financial sector. Government, please take note and act promptly to avoid manufacturing industry virtually disappearing, as it did in the 80s with Thatcherism.

  • Comment number 55.

    So, the fear created by the expert analyst short-sellers was unfounded.........

    But by stirring the market up they created the rush which drove them down....

    and now, they're way back up.

    Very clever and extremely underhand.

    Good con....and legal too.

    Come on GB, sort it out .

  • Comment number 56.

    Health secretary Alan Johnson's concerns about the NHS in the recession have been leaked in an email from the chair of NHS South East Coast.

    http://www.hsj.co.uk/news/2009/01/leak_reveals_alan_johnsons_pfi_concerns.html

    This concerns primarily the availability of funds from private sector banks to fund major public sector capital projects.

    Perhaps a more fundamental issue arising from the creeping nationalisation of the UK banks is that the PFI/PPP model might have run its course. After all, who is standing behind the banks, to whom the risk, so far as the public sector is concerned, might ultimately be transferred?

  • Comment number 57.

    "The board fully support the manager, there will be no question of a change of leadership at this club".........."Barclays do not........"

    Buy at your peril! Barclays, like th eothers, are a complete set of bankers.



  • Comment number 58.

    #18. CityGirl67

    Having recently visited various banks at local branches and found Barclays service to be far superior I could not understand that their fall was so severe.

    Unfortunately I didn't get in quick enough.

  • Comment number 59.

    Say no more.

    Nudge Nudge Wink wink.

    Where have you heard this?

    "To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service."

  • Comment number 60.

    A truly scandalous puff-piece:

    "Barclays could not make such confident statements without the approval of its auditors and also that of the City watchdog, the Financial Services Authority - and that surely they can't all be wrong."

    What planet are you on? They've all been wrong so far.

  • Comment number 61.

    B&B,RBS,HBOS and all the others said the same...
    "we are a well funded and profitable company''.
    If Barclays does go pear shaped, on Wednesday, we must be at about Nov.1st 1929...


    ''...and now on behalf of the 'UK Bankers Bonus Appeal Fund', a short message from the BBC...'

    ''Get stuffed''.

  • Comment number 62.

    So the chairman of Barclays has soothed the market with ancient history.
    I wonder what his predictions are for this current year's profits?

  • Comment number 63.


    Fear not ! We are saved !

    MacDonalds are opening another 1,000 branches

    Respite Big Merv, quantitive easing is no longer required
    (not in the monetary sense anyway)

    We shall use burgers for currency !

    The London Sauce Exchange will do you a Barclays share per burger
    or if you're a tad boracic, two RBS shares for a bite

  • Comment number 64.

    Robert, have you been talking to Stephanie today? Seems strange to see 2 pieces, both saying that our banks are OK.

    So all the analysis of toxic debt and over -exposure was just fluff? There isn't a financial meltdown going on? The flow of money bank to bank is just in fine shape is it? Did I just dream that the US's biggest banks failed?

    methinks you might be joining the Blue Sky Ostrich Club

  • Comment number 65.

    What Lloyds are saying is they would like to be allowed to keep those billions of pounds of taxpayers' money without repaying it. Conversion of preferred to common is exactly that.

  • Comment number 66.

    So the banking situation is stabilising is it, or is it just a chance to have a brief look at what remains within the still smoking wreckage that was the banking industry, afternoon tea lets say, just before the wave of unemployment and corporate failures reverberates back down on them in about 6 to 12 months and they have to revise all their figures...again.

    Enjoy the break everyone.

    I could be wrong of course.

    Jericoa.

  • Comment number 67.

    If indeed there has been an attempt to short sell Barclays shares, was wondering if similar rules exist to prevent potential collusion between those shorting as presumably exist to prevent upward market manipulation? I refer you particularily to the recent documentary about porsche, volkswagon which inadvertantly seemed to suggest there might have been communication between hedgefund managers.

  • Comment number 68.

    I am a novice stockbroker who has only been purchasing and selling shares during the last 3 months and I have been very puzzled by the continued negative comments about Barclays Bank, despite them advising that their balance sheet was sound.

    Your comments today "It's slightly odd that the penny should at last have dropped for investors" are most welcome but I do wonder why you have not made them earlier. It appears that the penny has only just dropped with you too yet a novice like me has been asking this question continuously over the last few days.

    I would welcome your comments on why they have received such bad press recently -could this be because of short selling perhaps? Your comments on this subject may prove valueable

  • Comment number 69.

    15 wykhamist

    Your second para was a bit of an ouch. lol

  • Comment number 70.

    You seem to think that banks should be trusted, but there ihas been ample evidence to the contrary over recent months. That is exactly the problem. I was asked by Bradford and Bingley for more money on a rights issue. If I had believed them and given them money I would be even more out of pocket than I am. Also, how many auditors can be trusted who signed off all the banks accounts as satisfactory before it became obvious much of the assets were toxic and worthless.

  • Comment number 71.

    It seems pointless to be trying to debate with a three hour time lag.

  • Comment number 72.

    On 16 January, Barclays made the public statement that, after all costs, impairments and market valuations they expected to report profits over £5.3 bn - about the same as the ordinary share capitalisation. If it subsequently turned out that this was not true, and that the directors knew it, they would have gone to jail.

    This was not enough to stop all the world and his wife who spent most of last week talking Barclay's down - the Government, so called City analysts and the financial press, who were in little short of a frenzy, and for all practical purposes calling John Varley a liar.
    As a result, small shareholders have nearly been wiped out, ordinary bank employees have been impoverished and beleagured pension funds have been hammered again by a bunch of muppets (and this includes the Government) who think that they know better than the directors what Barclays financial situation is.

    Today, Barclays have expanded on their 16 Jaunuary statement and, as even Robert Peston has to admit "Barclays could not make such confident statements without the approval of its auditors and also that of the City watchdog, the Financial Services Authority".

    Even now, some people (like #10) are still saying that "So why should any investor suddently think that the Barclays crowd are telling the truth". The answer is that they have to and I'd rather have Marcus Agius and John Varley in my lifeboat than Gordon Brown and Alastair Darling.

  • Comment number 73.

    If Barclays are so profitable why did they need to raise £7 bn last November?

    Barclays are only telling us what they want us to know eg assets - what assets do they actually own which are going up in value, not down?

    Where's the beef?

  • Comment number 74.

    36. At 4:46pm on 26 Jan 2009, Venachar01 wrote:

    Unfortunately Mr Peston as a shareholder I was told by Fred that RBS was in reasonable nick and they wanted the rights issue to beef up their reserves. Would you believe a major bank CEO at this time? No they have broken the trust between the company officers and shareholders.

    To which I say


    Well that's because the lazy press that anyone labelled banker is bad news through generalistic lazy reporting and convincing people like you, that if one is bad they are all bad, without really getting to the facts of every position

    It's an easy term to sell and grab a headline, but get journo's to explain what they mean beyond the headline, is beyond most of them.

    Same goes for the word politician ..... a few bad eggs and they are all on the take .... the house of Lords will now suffer the same treatment and will be pilloried from pillar to post, even those that do a job diligently and to the best of their ability.

    Watch the headlines in the next few weeks and see.

  • Comment number 75.

    Come on Robert we are 'officially' 6 months into a recession (more like over a year IMHO) and still not a single bit of criticism of Brown & co

    The world will not collapse you know, we can take it

  • Comment number 76.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 77.

    Barclays chairman, the FSA and the auditors assure everybody that Barclays is sound as a pound

    RBS chairman and auditors did the same (FSA nowhere to be seen) and then went belly up

    I don't agree with Robert's analysis of Barclays and I would not touch their shares with a barge pole

    If Barclays are making such huge profits why did they need to raise £7bn - Barclays are hoping the tide will turn before they have to admit to a huge black hole in their accounts

  • Comment number 78.

    OK Robert, you keep talking about getting the banks lending again so how about this, reported elsewhere on teh BBC web-site

    Pfizer announces a $68bn takeover of Wyeth of which $22.5 bn is to be raised from the banks

    This the sort of thing you had in mind?

  • Comment number 79.

    Its becoming apparent to me and I suspect many others that there is a deliberate policy by TPTB, of not allowing posts on this blog to be moderated in a timely fashion.

    That way TPTB hope people will get bored and go off and find other things to occupy their minds.... like watching reality tv or the latest celeb chef.

    Come moderators wake up, there are lots of free thinking people here waiting to express themselves!

  • Comment number 80.

    Now its a 3 hour delay to moderate.

    Perhaps some ex steel workers could be taken on to clear the backlog.

  • Comment number 81.

    I think it would be a good idea if people would read the annual report of the banks. And no I am not even suggesting to look at the numbers now but could it be a coicidence that a bank (Barclays) placing risk management at the core of it business is doing better than a bank who is not (RBS)? Barclars has been calculating Economic Profit, which a measure of value creation adjusted for risk, for years whereas the like of RBS did not...maybe there is a thought...

    Oh what did I say, read, think? Nah it seems it might be a stretch for many people here!

  • Comment number 82.

    47. investinbob wrote:

    "are people who speculate against the pound no more than city traitors"

    Define "speculate"

  • Comment number 83.

    The triangle between the public, the public servants and the financiers is thicken with distrust, arrogance, contempt, deceptions, and spins.

    What would Rothchild and Buffett have demanded from the banks ???

    Is it possible the banks/bankers have been setup, big time, and then used as scape goats to distract from some hidden agenda ??

    Control of military, media and money were always the most urgent primary objectives in past coups around the world.

  • Comment number 84.

    55. spiesisu wrote:

    "So, the fear created by the expert analyst short-sellers was unfounded.........But by stirring the market up they created the rush which drove them down....and now, they're way back up.

    Very clever and extremely underhand.

    Good con....and legal too.

    Come on GB, sort it out ."

    Please don't ever let the facts get in the way of a good conspiracy.

  • Comment number 85.

    Seems like a good deal for Lloyds if it means they save £500m in preference share interest.

    Victor Blank said in a letter to shareholders last week that the Bank intended to pay off the Preference shares in 2009 anyway and so if that proves true then any increase in the Government's shareholding will be short lived.

  • Comment number 86.

    The whole financial industry is discredited; so why do the BBC quote obscure investors who say that the pound is finished?

    Perhaps Standard and Poor have a view on this - and what is that worth?

    You can see that the markets have no idea about banks - despite the quotes in the media about Barclays, from the markets.

    When are you guys going to wise up that these clowns know nothing; have made money by betting and their opinions are worth nothing.

    IMHO any reputable media organisation would be trying to put a balanced reporting face on - instead of the daft spin that the BBC rolls out.

    Stop trying to pull a story and try to step back and take a balanced view. The world isn't coming to an end, the hysteria about the current situation is fuelled by the media (and we pay for the BBC to do damage); ok we are going to have a change - let's get on with it without the media (BBC) doing even more damage.

  • Comment number 87.

    Brill idea from Lloyds, we bail them out, pay them the money and have NO voting rights on the shares we get.
    These city bankers must think we were born yesterday. MUGS

  • Comment number 88.

    This man is a national disgrace. He revels in doom and gloom and acts as if he is the only man in the country to know the real facts.

    The truth is - he has contributed in a big way to the nation's depression. Please remove his sneering face from our screens and his self-righteous blog from the internet.

  • Comment number 89.

    Thanks to advice of forum members bought into Barclays at 51p on Friday. (Not a great number of shares btw) and I expect them to go to about 120p.

    They deserved to go down, but not by that much. The lame banks are a different matter and deserve of their market valuation.

    Needless to say once I sell, I shall be shorting the market and driving them back down again only to buy in again as the mugs once again realise my tactics panicked them. :)

  • Comment number 90.

    Post 60

    Can not agree more, over a period of less than six months the whole finance sector, and the regulators have turned over a new leaf. A bit like saying that 100% of convicted criminals will get out of jail and not re-offend, it is a well known fact that many criminals perfect their trade in prison and become more proficient at crime when they get out. Using this as a poor ? comparative to the finance sector, can we really believe what they are saying.

    Also agree with post 55, short selling scam or what ?.

    I must urge people to watch, on iplayer, the program detailing the great stock exchange crash of the 1930`s. A real eye opener to what has gone on over many years and recent months.

  • Comment number 91.

    #37 - nice idea, but there is something called a 'closed period' - when company directors are not allowed to deal in shares in their companies in the period leading up to announcement of results - this is due to them have access to financial info ahead of public announcements (insider trading)

    interesting though, Varley, Diamond, Seegers et al did invest quite a lot in late 2007 (i think it was a couple of mil each) to show confidence and try to prop up the Barclays share price when they were going for ABN - i think they paid about £7 a share at the time!

    I guess they may have written off that personal investment, but at least they still have their jobs though which would not have happened if that little deal had gone through!

  • Comment number 92.

    #71 sosraboc wrote: "It seems pointless to be trying to debate with a three hour time lag."

    As others have pointed out, it may be deliberate editorial policy. A lot of ground can be covered in a debate spanning 500 comments with prompt moderation, especially as a few contributors have a clue, but if the output is unfavourable, a time delay will reduce it to a mere hundred simple yays or nays.

    What is this article meant to accomplish anyway, a bridge loan of PR?

  • Comment number 93.

    All this pessimistic talk, tantamount to treason, according to Gordon Brown anyway. It may be true that we can not trust bankers or politicains as far as we can throw them, but this would always have been the case. We should not say so, however, or the economic collapse will be blamed on our "negative vibes", and not government and banking leaders who either a) did not see this coming (incompetent) or b) did see it coming but did not act in the national interest (incompetent villains). Unless c) they did see it coming and did act in the national interest and it could have been a whole lot worse (unconvincing incompetent villains).

  • Comment number 94.

    #92 Hi again

    Anyway this isn't really the story of the day.

    Two more are more worthy:

    (1) massive lay offs worldwide

    and

    (2) Lords taking brown envelopes.

    Time to stop blogging, time for marching on Westminister and the corrupt House of Lords!!!

  • Comment number 95.

    Contrary to received wisdom, people cannot talk themselves into a recession. They can only talk themselves into looking stupid as the facts plainly contradict them. So what do the facts say? Is there a recession or not?

  • Comment number 96.

    42. godfreybrown

    "...In the case of Barclay's the traders and finacial insitutions should be questioned as to why they decided to mark down the share prices so aggresively and if their answers are questionable then they should lose their licence to operate."

    If their view of the share price was thought to be so wrong, it would have resulted in a tidal wave of buying. This hasn't happened. Today's bounce in Barclays recovers about half of last week's losses, I think.

    Come to think of it, Godfrey, if the traders have got it so wrong and you, without the benefit of 20/20 hindsight knew Barclays was so undervalued, why didn't you pile in and "fill your boots"? You could then come on here and tell us how smart you were at the City traders' expense.

  • Comment number 97.

    #95

    The facts say that things are very bad indeed,

    But then we are classed as "doom and gloom merchants".

    Wasn't this situation clear back in the Autumn??? It was to me.

    Recession, Depression, Economic collapse, call it what you want but I've never seen anything like this before. It's DIRE!

  • Comment number 98.

    Hi,
    I work for Barclays and i dont understand the criticism that Barclays is getting - a bank that has managed it assets well, continued to grow in tough market conditions and above all made a substantial profit should be respected- yet apparently this is not good enough!

    It is not Barclays fault that its competitors took their customers money and flushed it down the drain, just because some banks behaved badly - and should be punished severly - does not mean Barclays should too.

    And Barclays did not raise £7bn because they needed to - it was ordered too by the government to restore stability to the financial system and the huge losses of other banks.

    We should be happy that barclays has managed to avoid the losses of RBS and Lloyds - yet all i hear is how badly EVERY bank has done - which is not true.

    So when passing judgement look at what banks have done the real damage and then look at the banks that have done what they should - manage assets and make money so that it can be reinvested into the economy.

  • Comment number 99.

    The Chairman of LLoyds Banking Group wrote to shareholders on 22 Jan stating that they intend to repay the Government's preference shares in 2009. If this is true its not likely that they will also be asking for more finance. The sooner they issue their audited accounts the better it should help deal with all the rumours.

  • Comment number 100.

    People seem have expectations of auditors. As I understand it they do not have any responsibility to shareholders. I seem to remember there was a judgement sometime ago. They are paid by the company and presumably have some liability to the Board or Directors but their contract of appointment usually has too many disclaimers.

    Maybe someone more knowledgeable could enlighten us. All that comes into my mind when I think of auditors is rather expensive chocolate teapots and ashtrays on motorcycles.

 

Page 1 of 2

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.