Barclays Plc named KPMG its new auditor, ending a 119-year relationship with PricewaterhouseCoopers LLP amid a British regulatory investigation into the reporting of the bank’s accounts.
KPMG will take over in 2017 after winning a bidding process started in March last year, according to a statement from the London-based bank on Friday. In December, the U.K.’s Financial Reporting Council started a probe into PwC’s role in reporting on Barclays Bank Plc’s compliance with regulators’ client asset rules.
Auditors have been criticized by U.K. lawmakers for not spotting practices that led to the financial crisis of 2008, which resulted in 1 trillion pounds ($1.6 trillion) of taxpayer money being used to prop up the nation’s banks. New Chairman John McFarlane, 68, has vowed to speed up the overhaul of Barclays and is reviewing the bank’s performance. He has already replaced one of its corporate brokers.
Barclays, the second-largest British lender by assets, was fined 38 million pounds in September for failing to maintain proper records on 16.5 billion pounds of client money its investment bank placed with outside parties.
In contrast to Barclays, HSBC Holdings Plc hired PwC as its auditor in August 2013, replacing KPMG after more than 20 years. Barclays paid 44 million pounds in total compensation to PwC and its associates in 2014, according to its annual report.
PwC and its predecessors have audited Barclays since 1896 and new European Union and U.K. rules make it compulsory for FTSE 350-traded companies to review their external auditor at least every 10 years and change the firm at least every 20 years.
Barclays conducted “a very thorough, open and transparent audit tender process,” Tim Breedon, the board member in charge of picking the new firm, said in the statement. “We thank PwC for their significant contribution as Barclays’ auditors. We look forward to working with KPMG in the future.”
JPMorgan Chase & Co. replaced Credit Suisse Group AG as Barclays’s corporate broker last month after 25 years with the Swiss firm. Deutsche Bank AG retained its advisory role, held since 2011.