Barclays has secured approval from the High Court of Justice of England and Wales for the proposed ring-fencing of its day-to-day banking activities.
High Court chancellor Geoffrey Vos approved Barclays’ ring-fencing plans after dismissing concerns of 100 pension scheme members that the new structure will negatively affect members of Barclays’ pension scheme.
Judge Geoffrey said the new process agreed with Barclays’ pension trustees would provide sufficient support for the scheme, which has 230,000 members.
The ‘ring-fencing’ plan, which is one of the reforms brought in by the UK government, requires big lenders to separate their core banking services in the UK from riskier activities such as investment banking.
The law is scheduled to come into force from 2019.
With the court order, Barclays is now expected to start and fully establish the ring-fenced bank in April 2018.
The ring-fenced bank, known as Barclays Bank UK PLC, will be separate from Barclays Bank PLC. Both firms will operate alongside, but independently from, one another as part of the Barclays Group under Barclays PLC.
Barclays is also seeking permission from the Prudential Regulation Authority (PRA).
This ring-fencing law aims to avoid a repeat of the bank failures seen during the 2007-09 financial crisis, during which Britain rescued Royal Bank of Scotland and Lloyds Banking Group at a combined cost of £66bn to taxpayers.