Barclays said it expects to take a £450 million ($588.8m) hit on mishandled structured product sales causing the British bank to delay its share buyback.
The lender said it issued $15.2 billion more structured and exchange-traded notes than it had registered for sale in the US over a period of about a year, heavily overshooting its $20.8bn limit.
The securities must now be bought back at their original purchase price, the bank said. The trading error was under investigation, it said.
Barclays Bank, the subsidiary that holds the lender’s corporate and investment bank, found that “securities offered and sold under its US shelf registration statement during a period of approximately one year exceeded the registered amount”, a statement by the lender said.
"Barclays has commissioned an independent review of the facts and circumstances relating to this matter including, among other things, the control environment related to such issuances," it said.
"Separately, regulatory authorities are conducting inquiries and making requests for information."
The mishandled products were two exchange-traded notes linked to crude oil and market volatility, sources said, with the bank suspending sales and issuance of the notes this month.
The firm issued about $36bn of investment products after registering with US regulators in August 2019 to sell up to $20.8bn, the bank’s statement said, with the trading error now requiring Barclays to repurchase the affected securities — a so-called rescission offer — at their original price.
The bank said its "best estimate at this time" was that the loss would amount to £450m, cutting its core capital ratio down to the middle of its 13-14 per cent target range, with the loss estimate not including tax.
As a result the bank said it would delay a planned £1bn share buyback, first unveiled on February 23 as part of its full-year 2021 results, until the second quarter of this year, while the independent review was carried out.
Barclays' wider investment bank had previously proved a stellar performer for the group over recent years, helping it post a record annual profit for 2021.
Analysts at Shore Capital said in a note that the bank appeared to be "tripping over its shoelaces", while other analysts called the mistake “basic”, “bizarre” and “embarrassing”.
Major banks typically file for blanket registrations that allow them to regularly issue notes that give clients a chance to bet on everything from market volatility to the performance of shares.
Market observers also said they could not recall a bank’s issuance exceeding the amount it registered, let alone blowing billions past its limit.
Chief executive C S Venkatakrishnan, who took charge of the lender in November, was the group’s chief risk officer at the time the registration document was filed.
“This kind of seemingly basic error may shake confidence in the investment bank going forward,” said Fahed Kunwar, an analyst at Redburn.
“With a new management team in place, there are already questions on the ability of the investment bank to continue to its strong performance.”
Shares in Barclays were down 2.8 per cent at 11.37am London time on Monday.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
