SFO Qatar probe yet another bruise to Barclays' reputation

Laura Kuenssberg

Former Business Editor

Barclays logo in London's financial district Credit: Press Association

You might have thought it couldn't get worse for Barclays. But tonight the bank has admitted it is being investigated over payments made at the height of the financial crisis to Qatar.

We knew already the FSA, the regulator, was considering if the bank had been clear enough at the time about what went on when the bank was thrown a five billion pound lifeline from the Middle East while other banks were threatening to crash around them.

But now the Serious Fraud Office is launching its own inquiry too.

The SFO has more powers to prosecute than the FSA, the City watchdog, so the investigation moves the accusations into another realm. The SFO is already looking at the bank's involvement in rigging interest rates in the Libor scandal.

It also could crank up the pressure on the current Financial Director at the bank, Chris Lucas.

He is one of those whose role in these deals is being investigated by the FSA. It's harder, although not impossible, to see how he can stay in post while the SFO investigates if it emerges he is in the spotlight of this inquiry too.

Barclays Bank at Canary Wharf, London Credit: Press Association

And as Barclays moves ever closer to appointing its new chief executive, (a lot of smart money is on Barclays' insider Antony Jenkins from the 'safer' high street side of the bank') this new investigation could hasten a wider clearout of the rest of the board that some in the City believe is on the cards.

Barclays has been extremely proud that it did not have to rely on money from the taxpayer at the height of the financial crisis, instead doing this significant deal with money from the Middle East.

The irony that the deal may end up causing them financially and reputationally will not be lost on the bank's enemies.