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| Barclays to issue £5.8bn new shares to plug shortfall | |
| (35 minutes later) | |
| Barclays will issue £5.8bn in new shares as part of a move to plug a capital shortfall created by new regulatory demands. | Barclays will issue £5.8bn in new shares as part of a move to plug a capital shortfall created by new regulatory demands. |
| The bank will also issue £2bn of bonds that are turned into shares or wiped out if the bank gets into trouble. | |
| Barclays said adjusted second quarter pre-tax profit fell 17% to £3.6bn. | |
| The share sale will be done as a rights issue, giving existing investors the opportunity to buy new shares so their stakes will not be diluted. | |
| Barclays chief executive Antony Jenkins said the plans enabled the bank to maintain its planned level of lending growth. | |
| "I am certain the decisive and prompt action we are taking will leave Barclays stronger," he added. | |
| Barclays' move comes after the banking regulator - the Prudential Regulation Authority (PRA) - issued tough new capital requirements aimed at ensuring banks are protected from the risk of investment losses, even in the event of a fresh financial crisis. | |
| The PRA requires all banks to have a minimum leverage ratio - a measure of financial health indicating the amount of capital held by the bank relative to its gross lending - of 3%. | |
| Barclays has also set aside an additional £1.35bn for PPI Payment Protection Insurance misselling costs and £650m for interest rate hedging compensation. | |
| Payment protection insurance (PPI) was designed to cover loan repayments for policyholders who became ill, had an accident or lost their jobs. | |
| Yet it was mis-sold by banks on a massive scale to customers who did not want or need it. |