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Millions for 45 former Barclays bankers
Nick Goodway17 Sep 2009
A group of 45 bankers stand to make more than £240 million between them after they quit Barclays to take on a contract to manage £7.5 billion of the bank's riskiest assets, it emerged today.
The deal was announced by Barclays yesterday, but the true extent of the potential profit for the bankers taking on the so-called toxic assets only emerged this morning.
They are led by Brits Michael Keely, who was one of the senior executives at Barclays Capital, and Stephen King who headed its mortgage trading arm. The team has registered the new fund in the Cayman Islands, and has set up a fund management business in New York which will receive £24 million a year from Barclays for the next decade to manage the toxic assets.
If the products increase in value over that time, their profit will be far bigger. Meanwhile, Barclays is retaining the risk of losses if the products default.
The move will see the 45 bankers potentially avoid any new strict rules on pay and bonuses which come out of next week's meeting of the world's top economies leaders in Pittsburgh.
In a complicated piece of financial engineering, Barclays said the shift of assets did not remove any risk from its balance sheet, but guaranteed it a more steady stream of income from them.
City analysts admitted they were puzzled by the scheme and could not see any great immediate benefit in it for Barclays.
Reader views (3)
Banks need to pass on their gross profits (bank charges, interest etc etc)onto someone....Unfortunatly scum like this will always be one step ahead on the legislation
- Dac - Ealing, London, 18/09/2009 10:18
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Barclays has no public assistance seems, which seems to have passed you by, Keith. So that's you told.
On the other hand, this is a complete fraud to get round forthcoming bonus rules and correct accounting for these risk on their books. On that basis, yes, the public should be told before they invest in Barclays which now has all the risks, yet none of the rewards.
- Da, London, 18/09/2009 08:54
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Why are we paying our hard-earned taxes to these crooks ? We need to be told.
- Keith Price, Luton England, 17/09/2009 14:18
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