Barclays reputedly being probed by the Financial Conduct Authority

Barclays is reportedly under investigation by the Financial Conduct Authority for alleged deficiencies in its compliance and anti-money laundering procedures.

The financial services regulator last year called for an independent review of the bank’s systems after noticing a large number of money laundering and so-called “know your customer” incidents. according to the Financieele Dagblad.

Know your customer guidelines are mandatory requirements for financial institutions to verify customer identity and risk factors each time a new account is opened.

They are designed to prevent the concealment of proceeds earned from criminal activities such as drug trafficking, bank robberies and corruption.

The FT reported on Friday that the FCA had written to Barclays bosses in UK retail, wealth and corporate banking asking for a “judgment by skilled persons”, citing people with expertise.

Such a review, also known as “Section 166,” usually involves an outside party, such as a law or accounting firm, conducting an investigation into issues raised by authorities and those activities that may raise concerns. brings to light.

Depending on what such an investigation reveals, the FCA can decide whether or not to take enforcement action, which only happens in a minority of cases.

The financial regulator has filed several high-profile money laundering and compliance cases in recent years as it tries to shake off a reputation for being too weak to deal with financial crimes.

It fined UK banking giants NatWest and HSBC £264.8m and £63.9m respectively in December 2021 for deficiencies in their anti-money laundering controls.

Enforcer: The Financial Conduct Authority has brought several high-profile money laundering and compliance cases against UK banks in recent years

In NatWest’s case, the group admitted to receiving £365 million – part of which was deposited in black bin bags – from defunct Bradford-based gold dealer Fowler Oldfield over a four-year period.

More recently, the FCA imposed a £107.7 million fine on Santander after finding improper controls at the lender’s corporate banking operations.

Barclays has also been sanctioned by the regulator on multiple occasions, including twice in 2015 when it paid the largest fine in FCA history, £284 million, for inadequate controls on its foreign exchange (FX) trading.

Since then it has had to make payouts for raising investment from Qatar without telling investors, falsely selling timeshare loans in Malta and overselling £11.5bn of structured finance products in the US, among other things.

These blunders have contributed to a slowdown in Barclays’ sales and earnings growth over the past year, as well as a decline in M&A activity amid significantly heightened economic uncertainty.

On Wednesday, the FTSE 100 company will report its full-year results, with analysts forecasting Barclays to post £4.9bn in attributable profit, compared to £6.4bn last year.

This is despite they also expect the group’s income to rise by around £3.3bn due to successive interest rate hikes by the Bank of England and other global central banks, mortgage transactions and consumer card spending.

Both the FCA and Barclays were approached for comment by This is Money but declined.

Barclays Shares were 2.1 percent lower at 185.6 pence late Friday afternoon, though their value is up 14 percent year-to-date this year.