LONDON (Reuters) - The interest rate rigging scandal that has rocked British bank Barclays (BARC.L) will be “put in perspective” by the fines handed out to rival banks, according to comments made by its top executives to staff.
“As other banks settle with authorities, and their details become public, and various governments’ inquiries shed more light, our situation will eventually be put in perspective,” the bank’s executive committee said in the memo to staff on Friday.
They admitted that customers, clients, shareholders and regulators “all have a right to feel let down” after the bank was fined $450 million by U.S. and UK authorities for manipulating Libor interest rates.
But the bank played down speculation it will sell or spin-off its investment bank or make an abrupt change in strategy.
In what it called “an unequivocal statement” it said: “Our strategy and business model were right for Barclays before recent events, and they remain right for Barclays now.”
Barclays confirmed the authenticity of the memo, which was from Executive Chairman Marcus Agius and the executive committee, and titled “Restoring our Reputation, Building our Business”.
Barclays is the only bank so far to admit any wrongdoing in giving false information as part of the complex process of setting Libor, in order to rebut speculation about high funding costs during the financial crisis.
But more than a dozen banks are expected to be drawn into the scandal, which is being probed by authorities in North America, Europe and Japan.
Barclays said it had paid a heavy price in terms of its reputation and leadership. Its chief executive Bob Diamond has quit and Agius will leave once new leaders are picked.
The memo said the task now was to restore its reputation, including “building an overarching brand recovery plan”.
Appointing a new chairman and chief executive would be vital for that, but “these processes should not be rushed”, it said.
“The macro-environment remains febrile, especially in Europe. We have to remain vigilant on balance sheet exposures and risk management,” it added.
The scandal has also brought to light a strained relationship between Barclays and its regulator, the Financial Services Authority, which has concerned investors.
One top 30 investor in the bank said: “It (Barclays) has done very little to smooth its relationship with the government or the regulator or even shareholders.
“If it tries to tackle some of the cultural issues and the excessive remuneration that’s built up over years ... it could actually improve the business model but it depends how fundamentally changed things are by any change in regulation,” said the shareholder, who asked not to be named.
Jerry del Missier, who quit as Barclays’ chief operating officer on July 3, will be quizzed by UK lawmakers on the Libor scandal on Monday.
Additional reporting by Chris Vellacott; Editing by Stephen Powell