THE Church Commissioners are engaged in "intensive" board-level discussions with Barclays Bank, seeking assurances of a "fundamental turnaround in culture".

Barclays was fined £290 million last year for manipulating the Libor borrowing rate, with other banks. The Commissioners' shareholding in Barclays was worth £11.4 million at the end of April.

The Commissioners' annual re-port and accounts for 2012, published yesterday, says that they have "commenced an intensive engagement with Barclays seeking robust assurance that, having repeatedly let down society with its conduct, Barclays is making a determined and successful effort to effect a fundamental turnaround in culture".

A spokeswoman for the Commissioners said that the discussions, the content of which were confidential, began in June last year, and had included Board members.

"We have been encouraged by the determination of the bank's new leadership to turn a corner and to foster a more ethical culture," the spokeswoman said. "However, ethical conduct cannot simply be enforced. We will know that Barclays has truly transformed when it inspires its staff to make sustainable profits through serving its customers and fulfilling its fundamental role in society."

The First Church Estates Commissioner, Andreas Whittam Smith, told the General Synod last year that the Commissioners were "rapidly going to do some work on the banks", after revelations that Barclays, together with other large banks, had manipulated interest rates (Synod, 13 July).

The annual report says that assets managed by the Commissioners were valued at £5.5 billion at the end of 2012. The Commissioners' fund achieved a 9.7-per-cent total return on investments in 2012, exceeding its target of inflation plus five-per-cent return. In 2011, in more difficult market conditions, the fund achieved a return of 2.9 per cent (News, 16 May 2012).

The Secretary to the Church Commissioners, Andrew Brown, said that the fund had performed "satisfactorily" during 2012.

"The Assets Committee made wise decisions, keeping away from certain longer-term bonds," he said. "Within equities, our managers significantly outperformed the market; and our residential and rural property holdings performed strongly."

The Commissioners' expenditure in 2012 amounted to £207.3 million, up from £195.6 million in 2011. Of the total expenditure in 2012, £120.3 million went on clergy pensions based on service before 1998; £42.2 million on parish mission and ministry; £31 million on supporting the ministry of bishops and the Archbishops - mainly their staffing costs; £8.7 million on the stipends of cathedral clergy and grants to cathedrals; and £5.1 million on "other charitable expenditure, in- cluding support for other church bodies, and support costs for pastoral reorganisation", Church House said.

To view a video on the work of the Commissioners, visit http://youtu.be/yUfDAxtuOog