Britain's second largest bank said it has secured £7.3 billion in fresh capital, mostly from Qatar and Abu Dhabi. Barclays thus avoids seeking help from the British government, a move that led other major UK banks to nationalisation.
The fundraising is being made through a range of complex capital instruments, which could see
An issue of reserve capital instruments (RCIs) will pay annual interest of 14 percent until June 2019. Warrants representing billions more pounds could also be issued.
Barclays shares initially jumped after the news as investors welcomed the bank's ability to raise cash in tough markets and an adequate trading update, but later eased back. At 0930 GMT they were unchanged at 205-1/4 pence after touching 228p.
The bank said group profit in the first nine months of this year was "slightly ahead" of the same level a year earlier.
It took a net writedown of 129 million pounds from credit market writedowns for the third quarter, but said 1 billion pounds of gains on debt it carries were reversed in October.
Barclays is raising up to 2 billion pounds from Qatar Holding and 300 million from Challenger, an investment vehicle of a member of
Barclays' investor base has been transformed in the past two years, as it has raised funds from investors in
"There has been a significant shift in the availability of capital and economic power in the world over the last five years and we're ensuring we're aligned with those changes," said John Varley, Barclays chief executive.
Avoiding taxpayer cash
The bank is seeking to raise up to a further 1.5 billion pounds from the sale of MCNs (mandatorily convertible notes) with existing and other investors.
Asked on a conference call whether Barclays has enough capital to avoid more fundraising, Varley said: "Yes, we have what we need."
Barclays earlier this month turned down an offer of government funds under
Rivals Royal Bank of
Barclays said when the government's recapitalisation plan was announced that it planned to raise about 6.5 billion pounds, with 3 billion from the sale of preference shares and the rest from selling ordinary shares.
It had until the end of March to raise funds.
Those sales were expected to increase the bank's core tier 1 capital ratio to about 8 percent, analysts estimated, up from 6.3 percent after a 4.5 billion pounds fundraising in July.
It will lift its overall tier 1 ratio to above 11 percent from July's 9.1 percent.
Barclays has lost billions of pounds from credit-related asset writedowns and is faced with a sharply slowing
The bank expects to gain a competitive advantage by raising capital privately, while RBS and others will have the government as a major shareholder.
Date created : 2008-10-31