Poverty and Barclays Bank.

Shed a tear for one of the more wretched victims of the credit crunch, Barclays Bank, which has shockingly reported profits of only £7bn for 2007, down 1% from a year ago.

Profits at Barclays fell in the first quarter of the year because of tough market conditions, chief executive John Varley has said. Profit in January and February was in line with last year but poor trading in March pulled profits lower, he said. Results at Barclays Capital and Barclays Global Investors were "well below" the strong profits of last year but were still profitable, he added. While the second half of 2007 was "as hard a six-month period as I can remember and conditions in some markets in 2008 have remained difficult", he said.

He pointed to lower interest rates, high employment and forecast world growth this year of between 3 and 4% as reasons to retain a "sense of perspective about banks". The bank would aim to generate an annual "economic profit" - above normal investment returns - of between £9.3bn and £10.6bn over the coming four-year period, he said.

This Chief Executive, John “Greed is Good” Varley, has followed in the footsteps of his avaricious predecessor Matt Barrett in being motivated by short term yields at the expense of its core banking by leading the bank, through Barclays' capital, into substantial exposure to sub-prime, collateralised debt obligations, monolines, loans to private equity, and all the toxic stuff that did for Royal Bank of Scotland.


John Varley, The Face of Poverty

Through all this neither he nor his predecessor have lost their unrelenting focus on fleecing their cash cow U.K. domestic customers, those boring people who are only good for loading with illegal penalty charges and cross selling “their exciting and competitive” personal finance products!

The previous Barclays chief executive, Matt Barrett, candidly criticised his own product, suggesting that the astute consumer would do well to steer clear of it.

Giving evidence to the Commons' Treasury select committee he said he did not use credit cards from his own subsidiary, Barclaycard, because it was simply too expensive. A secondary factor was, as he earned over £4 m a year, he probably didn’t need to! He also revealed that he advised his four offspring to have nothing to do with credit cards either. "I do not borrow on credit cards. I have four young children. I give them advice not to pile up debts on their credit cards." Since 1992 Barclaycard (“Britain’s most recognised consumer brand.”) increased its interest rate to 17.9% even though interest rates had fallen by 2/3 rd over the same period. Then in the past year it has increased its "normal" rate to 22.9%, its cash withdrawal rate to 26.9% and changed its terms and conditions so you pay off the cheaper debt first, as you do! Years ago engaging in such usury was condemned from the pulpit and the perpetrators were obliged to have a sign with three balls over their shop to warn people about their real business before they walked through the door.



Recently, I have had the privilege, with millions of other fortunate consumers, of receiving two “specially selected” offers through my letter box. One “invited” me to borrow on an unsecured loan at “only” 12.9% and this offer was so “special” that “for my peace of mind” the interest rate would be fixed for the term of the loan. Incredible generosity I hear you say as one but greater kindness was to follow. The next personalised mail shot told me that as I was a “valued customer” I could borrow £15,000 secured on my home for only 8.9% and as a “strictly time limited offer” they would waive their “normal” administration fee of £950. Such generosity has made me feel “special” and “valued” indeed and made me wonder if this is what the “responsible” lenders are doing what are the dodgy back street sharks up to? Of course the back street crew are not receiving a £50 Bn. and counting, bailout from us, the taxpayers; to swap their spivvy mortgage backed SIV’s for Government backed Gilts. No doubt, future capital and dividend growth at U.K. Banks will be shared with us poor taxpayers who have taken so much of their risk away from their shareholders. Whilst bailing out the Banks with our money perhaps that impressive duo, Gordon Brown and the Deputy Chancellor, Alistair Darling, could explain how Teacher's and Nurse's salaries contribute to inflation but bank charges, petrol duty, Green taxes which don't help the environment, conspicuous consumption by the untaxed Non. Doms. and above inflation, Rail Fares, Car Taxes, utility charges and Council Taxes don't? I always find Gordon's and his Deputy's lectures on economics such good value.

But for now, John “Greed is Good” Varley, I do feel for the threat to your lugubrious life style and red braces but I won’t be intruding on your private grief and taking up your wonderful “special” offers. I just wouldn't feel right taking such unfair advantage of your kindness at this difficult time.