Barclays executive alleges money laundering in French outlets

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.

A leaked letter dated April 5th from Philippe Hébert, chief risk officer of Barclays France, to Tony Blanco, chief executive of Barclays France, alleges 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 3, 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 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 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 laundering.

Mr Hébert says elderly customers of Barclays France have been regularly mis-sold expensive products. He gives the example of a 97-year-old who was advised to put all his money into a Spirimmo life insurance product charging a 6 per cent annual fee. The bank paid €60,000 to settle a complaint by the client’s son, but no action was taken against the staff responsible, he said.

The allegations are a blow to Barclays, which said last week that 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.

Mr Hébert’s warning about failings comes less than five months after Barclays was fined a record £72 million by the UK’s Financial Conduct Authority for lax anti-money-laundering controls around ultra-wealthy Qatari clients.

– (Copyright The Financial Times Limited 2016)