Barclays look East to boost finances

Jun 26 2008 by Peter McCusker, The Journal

BARCLAYS has revealed details of a £4.5bn cash-call to new and existing investors in the latest move by a bank to boost finances hit by the credit crunch.

A raft of wealthy overseas groups have pledged cash under the share placing, which will see the Qatari royal family and Japan’s third largest bank among those set to become significant shareholders in Britain’s third largest bank.

Existing shareholders are also being offered the chance to take-up three discounted shares for every 14 already owned under the scheme designed to boost Barclays’ balance sheet.

Shares in the bank rose more than 6% yesterday on the full details of its long-awaited fundraising plans, sparking gains across the sector.

Barclays has reportedly been under pressure to increase its capital reserves after so far suffering a £2.64bn hit from the crisis in credit markets and collapse of the US sub-prime mortgage market.

A number of embattled rivals have also turned to shareholders for cash, with Royal Bank of Scotland raising £12bn, while Halifax Bank of Scotland and Bradford & Bingley are both in the final stages of their rights issues.