Nigerian international banking clients of Barclays Bank, with less than £100,000 to save/invest will as from yesterday (August 1) no longer have access to their accounts.
Barclays said in a letter sent out to Nigerian customers dated 12 June, 2017 that it was changing the minimum client balance requirement for the International Banking service.
“The new minimum level will now be £100,000. Top up your savings and investments to £100,000 or more before 1 August 2017 to continue with the service, or close your account and transfer your monies to another provider without charge,” the letters to Nigerian customers stated.
Banking sources tell BusinessDay that the bank had previously announced, in 2013, that it would focus on 70 countries globally. Customers in those that are not considered as “core” as others, such as Nigeria, will have their accounts closed unless they have more than £100,000.
In recent years, security measures have made it almost impossible for foreigners to open accounts with high street banks in the UK.
The terms and conditions of nearly all major onshore banks now explicitly state that they will only open British bank accounts for UK residents.
The changes come partly as a result of new international banking legislation, along with concerns over potential terrorist money laundering, sources say.
Other costs of servicing such accounts such as low interest rates, along with increased regulatory costs, have reduced the profitability of offshore banking services in recent years.
The recent Panama Papers leak, which revealed how Panamanian law firm, Mossack Fonseca, aided clients in tax evasion through the use of offshore bank accounts, has also compounded these concerns.
“Today, banks are increasingly nervous when it comes to taking on international clients, especially those from Nigeria,” a second banking source told BusinessDay.
Still, there is outrage from Nigerians who have a legitimate link with the U.K and feel the Barclays move is punitive.
“I lived in the UK 18 years before I moved back to Nigeria. I have obligations to service such as mortgages,” one recent expat said.
“Why should I close down my account just because I am no longer in the UK?”
London based Barclays posted a net loss in the second quarter of 2017, driven by the cost of selling down its Africa unit and an unexpected charge for the payment protection insurance scandal.
Barclays had a loss attributable to shareholders of 1.4 billion pounds ($1.8 billion), its first quarterly loss since 2015.
The bank reduced its stake in Barclays Africa Group Ltd. to 15 percent from 51 percent through a share sale, which has allowed the U.K. firm to deconsolidate the business and free up capital.
The lender said its common equity Tier 1 ratio, a key measure of capital, rose to 13.1 percent and will climb about another quarter-point from the Africa move.
PATRICK ATUANYA
