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| Version 1 | Version 2 |
|---|---|
| Barclays considers new share sale | Barclays considers new share sale |
| (30 minutes later) | |
| Barclays has said it is considering selling shares to existing investors to raise cash. | |
| The announcement comes after it was reported over the weekend that the bank has been in talks with foreign investors to raise £4bn. | The announcement comes after it was reported over the weekend that the bank has been in talks with foreign investors to raise £4bn. |
| It would become the latest UK bank to approach investors for extra capital as credit and economic conditions worsen. | 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 shares jumped as much as 8% on the news in early trading in London. | |
| Barclays said it was "actively considering" selling new shares "by way of a placing and pre-emptive offer to existing shareholders". | 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. | "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 also said that its pre-tax profit in May was "well ahead" of the level it was at in the same month last year and that profits at its investment banking division met management's expectations. | |
| Difficult conditions | |
| Barclays has so far this year written off £1.7bn in assets stemming from the turmoil in the global credit markets - much less than most of its UK rivals. | |
| But analysts say its capital ratio - a measure of balance sheet strength - is now one of the smallest in Europe. | |
| Barclays' chief executive John Varley has suggested that targeting a high capital ratio was important amid the current credit turbulence, leaving the bank's options open to seek extra capital. | |
| But until now, Barclays has not overtly stated that it would look to raise the extra money. | But until now, Barclays has not overtly stated that it would look to raise the extra money. |
| Barclays shares have fallen 13% this month as traders have hammered leading banks amid continuing concerns about their financial positions. | Barclays shares have fallen 13% this month as traders have hammered leading banks amid continuing concerns about their financial positions. |
| But watchdogs concerned about volatility in bank shares have vowed to crack down on so-called "short selling" where traders mark down the shares of leading companies only to buy them back later at a potentially huge profit. | But watchdogs concerned about volatility in bank shares have vowed to crack down on so-called "short selling" where traders mark down the shares of leading companies only to buy them back later at a potentially huge profit. |