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| Barclays shares up on sale talks | Barclays shares up on sale talks |
| (about 1 hour later) | |
| Shares in Barclays have rallied 22% after it confirmed it is in talks over the possible sale of its iShares fund management business. | |
| The bank said it had held discussions with "potentially interested parties", but no decision had yet been made. | The bank said it had held discussions with "potentially interested parties", but no decision had yet been made. |
| Reports have suggested that Barclays could sell the unit for up to £5bn. | Reports have suggested that Barclays could sell the unit for up to £5bn. |
| Barclays also confirmed it was talking to the Treasury over its "potential" participation in the government's Asset Protection Scheme. | Barclays also confirmed it was talking to 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". |
| Shares in Barclays closed up 22.67%, or 16.80 pence, at 90.90p. | |
| Application deadline | Application deadline |
| 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. |
| 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 |
| Analysts said Barclays could use the proceeds of any sale of the iShare business to pay the government fees required to join the scheme. | Analysts said Barclays could use the proceeds of any sale of the iShare business to pay the government fees required to join the scheme. |
| RBS, one of the current participants, paid £6.5bn in exchange for the government insuring its £325bn of toxic assets. | RBS, one of the current participants, paid £6.5bn in exchange for the government insuring its £325bn of toxic assets. |
| "If they [Barclays] get a reasonable sum, say north of £3bn, they could probably participate in the asset protection scheme without raising more capital," said NCB Stockbrokers analyst Simon Willis. | "If they [Barclays] get a reasonable sum, say north of £3bn, they could probably participate in the asset protection scheme without raising more capital," said NCB Stockbrokers analyst Simon Willis. |
| The government currently also insures £260bn of Lloyds Banking Group's toxic assets, and other banks have until 31 March to join. | The government currently also insures £260bn of Lloyds Banking Group's toxic assets, and 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. |
| Profitable business | Profitable business |
| 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. |