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Barclays in Treasury debt talks | Barclays in Treasury debt talks |
(about 1 hour later) | |
Barclays has said it is in talks with the Treasury over its "potential" participation in the government's Asset Protection Scheme. | Barclays has said it is in talks with the Treasury over its "potential" participation in the government's Asset Protection Scheme. |
The bank said any decision on whether it would participate, "and to what extent", would be based on "the economic merits to shareholders". | The bank said any decision on whether it would participate, "and to what extent", would be based on "the economic merits to shareholders". |
The Asset Protection Scheme uses government money to insure banks' riskiest assets against further losses. | The Asset Protection Scheme uses government money to insure banks' riskiest assets against further losses. |
Lloyds Banking Group and RBS are already signed up to the scheme. | Lloyds Banking Group and RBS are already signed up to the scheme. |
In exchange for gaining the insurance, they pay the government a fee. | In exchange for gaining the insurance, they pay the government a fee. |
The government currently insures £325bn of toxic assets at RBS, and £260bn at Lloyds. | The government currently insures £325bn of toxic assets at RBS, and £260bn at Lloyds. |
Other banks have until 31 March to join. | Other banks have until 31 March to join. |
Chancellor Alistair Darling hopes the Asset Protection Scheme will help restore confidence in the banking sector. | Chancellor Alistair Darling hopes the Asset Protection Scheme will help restore confidence in the banking sector. |
Sale talks | Sale talks |
Barclays also confirmed on Monday that it had held talks over the potential sale of its iShares fund management business, but that no decision had been made. | Barclays also confirmed on Monday that it had held talks over the potential sale of its iShares fund management business, but that no decision had been made. |
ASSET PROTECTION SCHEME Taxpayers underwrite banks' bad debtsEssentially an insurance schemeBanks pay a fee to take partBanks are liable for initial losses, similar to paying the excess on an insurance claim | ASSET PROTECTION SCHEME Taxpayers underwrite banks' bad debtsEssentially an insurance schemeBanks pay a fee to take partBanks are liable for initial losses, similar to paying the excess on an insurance claim |
"Barclays...confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the group's portfolio of businesses," it said. | "Barclays...confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the group's portfolio of businesses," it said. |
Reports have suggested any sale could raise up to £5bn. | Reports have suggested any sale could raise up to £5bn. |
Following the two announcements, shares in Barclays were up 11% or 8.5 pence to 82.6p. | |
Unlike Lloyds and the RBS, Barclays has stayed profitable amid the collapse of the financial markets. | Unlike Lloyds and the RBS, Barclays has stayed profitable amid the collapse of the financial markets. |
The bank reported profits before tax of £6.08bn for the full year of 2008. | The bank reported profits before tax of £6.08bn for the full year of 2008. |
Last October, Barclays announced a proposal to raise up to £7.3bn to strengthen its balance sheet, mainly from the state investment funds and the royal families of Qatar and Abu Dhabi. | Last October, Barclays announced a proposal to raise up to £7.3bn to strengthen its balance sheet, mainly from the state investment funds and the royal families of Qatar and Abu Dhabi. |