Barclays to suspend online services while it splits bank

Barclays’ online and mobile banking services will be unavailable this weekend, as the bank temporarily switches off access for 24 million customers to meet regulations designed to avoid taxpayer bailouts.

Throughout the night from 11.30pm on Saturday until 3.30pm the following afternoon on Easter Sunday, customers will be unable to check their balances using the internet or their mobile phones, make any payments online, or transfer money using the bank’s mobile Pingit app.

Customers will still be able to use their debit and credit cards to shop on the high street or buy goods from online retailers despite the big switch-off, and cash machines will also continue to work.

The changes come as part of the Bank of England’s ringfencing rules, introduced in 2011 but allowing banks until the start of 2019 to make changes, which force banks to split their riskier “casino” investment arms from their more straightforward retail and small business banking activities.

Having already prepared for about three years to switch the bank off and back on again, Barclays will use the shutdown to reorganise its IT network so that 24 million accounts can move to sit within its new ringfenced bank. It will be the seventh and final time the bank has closed down its systems, having started by reallocating some customers’ sort codes from the middle of last summer.

Barclays is not alone in making the changes, with HSBC, Lloyds, RBS and Santander UK also taking steps to split themselves in two, although its work is considered more complex because it has a bigger investment bank than many of its rivals.

Threadneedle Street estimates almost 1 million UK bank customers will have to use new six-digit sort codes as the high street lenders implement the rules, which are intended to make the financial system safer.

Different banks are taking different approaches to meeting the rules. RBS, which remains majority-owned by the government a decade after the financial crisis, chose to rename its investment bank as NatWest Markets as part of the ringfencing changes, attempting to move away from its troubled past.

HSBC is relocating the headquarters of its ringfenced bank to Birmingham, moving 1,000 jobs from its London base in Canary Wharf, while Lloyds and Santander UK are making comparatively smaller changes because they have relatively small investment banks.

Sir Ian Cheshire, the former boss of Kingfisher, which owns B&Q, will be the chairman of Barclays’ ringfenced bank, with other members on the board drawn to ensure its independence from the wider Barclays bank including Sir John Timpson, chairman of the family-owned shoe-repair and key-cutting chain, and Michael Jary, chairman of the organic food range Duchy Originals.

Having planned for months and employed thousands of workers on the project to meet the ringfencing rules, Barclays is making the changes over the long Easter weekend because it will give the bank as much time as possible before its branch doors open again on Tuesday morning.

About 1,500 staff will work on the changeover, most of them based at the bank’s technology centre at Radbroke Hall – an old luxury home in the style of a French chateau nestled deep in the Cheshire countryside, where the bank bases its global technology centre.

Barclays has been sending customers messages about the shutdown, apologising in advance that they would not be able to manage their accounts online, by phone or in the app.

Payments made into customers’ accounts will be added as soon as the work is finished, the messages said, while it advised them to move money between their accounts now before the work begins and said live updates would be available on the internet and on Twitter.