Barclays faces £50m bailout fine

Barclays has revealed it is facing a £50 million fine over claims it acted "recklessly" in its multibillion-pound bailouts from Qatar in 2008.

The Financial Conduct Authority (FCA) accused it of agreeing £322 million of secret payments to Middle Eastern investors to secure their support for cash calls totalling more than £5 billion at the height of the financial crisis.

Barclays, which contests the FCA's findings, said the fees relate to advisory services over five years.

It is also being probed by the Serious Fraud Office and regulators in the US, and admitted it does not know how much the final cost will be.

Barclays was warned about the potential fine on Friday and told shareholders on Monday in a prospectus document for a rights issue that will tap investors for another £5.8 billion to plug a £12.8 billion hole in its finances.

The FCA ruling follows its £290 million penalty last year for rigging the Libor interbank lending rate.

Barclays said the FCA's warning notices state that the main purpose of the agreements was "not to obtain advisory services but to make additional payments, which would not be disclosed, for the Qatari participation in the capital raisings".

Barclays is alleged to have broken listing rules which impel it to disclose information and "act with integrity" to shareholders.

The bank turned to Qatari investors in 2008, helping it avoid the same fate as Royal Bank of Scotland and Lloyds, which were bailed out by the taxpayer. It entered "advisory services agreements" with the Qataris in June and October 2008, but the fees were not disclosed at the time.

The bank revealed the latest blow as it warned it remains "cautious" about the trading climate.Barclays said its investment bank had a tough summer, with income in July and August down "significantly" on a year earlier. Income across the group was about £500 million lower during July and August, it added.