This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7456162.stm
The article has changed 9 times. There is an RSS feed of changes available.
| Version 6 | Version 7 |
|---|---|
| Barclays considers new share sale | Barclays considers new share sale |
| (about 5 hours later) | |
| Barclays has said it is considering selling shares to new and existing investors to raise cash. | Barclays has said it is considering selling shares to new and 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. | Royal Bank of Scotland has already raised £12bn through a rights issue, while HBOS is keen to raise £4bn. |
| Barclays shares jumped by as much 13% on the news in early trading but later fell back to be up about 3% by late afternoon. | |
| Prior to the announcement, Barclays shares had been hammered amid continuing concerns about its financial position and those of its rivals. | Prior to the announcement, Barclays shares had been hammered amid continuing concerns about its financial position and those of its rivals. |
| Analysts reacted well to the bank's intended capital move as well as its upbeat comment on current trading conditions which noted that profits in May were "well ahead" of the same month last year. | Analysts reacted well to the bank's intended capital move as well as its upbeat comment on current trading conditions which noted that profits in May were "well ahead" of the same month last year. |
| "We think it would go a good way towards drawing a line under the market's current capital concerns," said stockbrokers Keefe, Bruyette and Woods of the planned share placement. | "We think it would go a good way towards drawing a line under the market's current capital concerns," said stockbrokers Keefe, Bruyette and Woods of the planned share placement. |
| 'Active consideration' | 'Active consideration' |
| 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". |
| The firm said that it was keen to line up buyers - reportedly said to include foreign sovereign wealth funds - to take the shares at an agreed price. | The firm said that it was keen to line up buyers - reportedly said to include foreign sovereign wealth funds - to take the shares at an agreed price. |
| If a deal is struck, the new shares will then be offered to all of its existing investors, which have first right of refusal. | If a deal is struck, the new shares will then be offered to all of its existing investors, which have first right of refusal. |
| The Barclays boss has always sought to keep his capital options open | The Barclays boss has always sought to keep his capital options open |
| Analysts believe the new shares will not be offered at a discount to Barclays current share price so as not to dilute the value of its shares. | Analysts believe the new shares will not be offered at a discount to Barclays current share price so as not to dilute the value of its shares. |
| This arrangement may be unattractive to many of its shareholders, but the offering is likely to be underwritten by big financial institutions, putting Barclays in an advantageous position. | This arrangement may be unattractive to many of its shareholders, but the offering is likely to be underwritten by big financial institutions, putting Barclays in an advantageous position. |
| The Sunday Times reported that China Development Bank and the investment arm of the Singaporean government, Temasek, were being courted to buy more shares in Barclays. | The Sunday Times reported that China Development Bank and the investment arm of the Singaporean government, Temasek, were being courted to buy more shares in Barclays. |
| China Development Bank bought 3% of Barclays shares last year for about £1.5bn while Temasek bought a 2.1% stake worth about £1bn. | China Development Bank bought 3% of Barclays shares last year for about £1.5bn while Temasek bought a 2.1% stake worth about £1bn. |
| Barclays did not comment on the details of any share sale. | Barclays did not comment on the details of any share sale. |
| "A further announcement will be made in the event that the board of Barclays decides to pursue such an equity issuance," Barclays said. | "A further announcement will be made in the event that the board of Barclays decides to pursue such an equity issuance," Barclays said. |
| Difficult conditions | 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. | 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. |
| We think it would go a good way towards drawing a line under the market's current capital concerns Keefe, Bruyette and Woods on Barclays' planned share placement | We think it would go a good way towards drawing a line under the market's current capital concerns Keefe, Bruyette and Woods on Barclays' planned share placement |
| But there are worries that further write-downs are to come and analysts say the bank's Tier One capital ratio - a key industry measure of balance sheet strength - is one of the lowest in Europe. | But there are worries that further write-downs are to come and analysts say the bank's Tier One capital ratio - a key industry measure of balance sheet strength - is one of the lowest in Europe. |
| Barclays' chief executive John Varley has suggested that a high capital ratio is important amid the current credit turbulence, leaving the bank's options open to seek extra capital. | Barclays' chief executive John Varley has suggested that a high capital ratio is 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. |
| The recent volatility in bank shares has cast doubts over whether lenders will be able to ask shareholders for extra cash. | The recent volatility in bank shares has cast doubts over whether lenders will be able to ask shareholders for extra cash. |
| Watchdogs, concerned about market turbulence, 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 - seen to have contributed to the instability. | Watchdogs, concerned about market turbulence, 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 - seen to have contributed to the instability. |