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Barclays confirms it is considering a rights issue
Barclays has said it is considering selling shares to existing investors to raise cash in a rights issue, after Barclay's shares fell to a 10-year low on Thursday.
The announcement comes after it was reported over the weekend that the bank has been in talks with foreign investors to raise £4bn. Talk has been circulating for weeks that it could raise billions from a rights issue or by selling shares to sovereign wealth funds.
It would become the latest UK bank to approach investors for extra capital as credit and economic conditions worsen.
Royal Bank of Scotland has already raised £12bn through a rights issue while HBOS is keen to raise £4bn.
Barclays said it was "actively considering" selling new shares "by way of a placing and pre-emptive offer to existing shareholders".
"A further announcement will be made in the event that the board of Barclays decides to pursue such an equity issuance," the firm added.
Barclays' chief executive John Varley has suggested that targeting a high capital ratio - a measure of balance sheet strength - was important amid the current credit turbulence, leaving the bank's options open to seek extra capital.
Barclays Chairman Marcus Agius speaking about the global credit crisis, told reporters on the sidelines of an economic forum in the Kuala Lumpur yesterday."The crisis is not near an end. I think it will have a little further to go," amid concerns that big lenders will unveil more credit-related losses in coming weeks.
"But we are beginning to see trades taking place and assets beginning to come to their real value. It will work its way out."
The announcement comes after it was reported over the weekend that the bank has been in talks with foreign investors to raise £4bn. Talk has been circulating for weeks that it could raise billions from a rights issue or by selling shares to sovereign wealth funds.
It would become the latest UK bank to approach investors for extra capital as credit and economic conditions worsen.
Royal Bank of Scotland has already raised £12bn through a rights issue while HBOS is keen to raise £4bn.
Barclays said it was "actively considering" selling new shares "by way of a placing and pre-emptive offer to existing shareholders".
"A further announcement will be made in the event that the board of Barclays decides to pursue such an equity issuance," the firm added.
Barclays' chief executive John Varley has suggested that targeting a high capital ratio - a measure of balance sheet strength - was important amid the current credit turbulence, leaving the bank's options open to seek extra capital.
Barclays Chairman Marcus Agius speaking about the global credit crisis, told reporters on the sidelines of an economic forum in the Kuala Lumpur yesterday."The crisis is not near an end. I think it will have a little further to go," amid concerns that big lenders will unveil more credit-related losses in coming weeks.
"But we are beginning to see trades taking place and assets beginning to come to their real value. It will work its way out."
Mon, 16th Jun 2008