Eastern promise for Barclays

Jul 19 2008 by Peter McCusker, The Journal

ASIAN and Middle Eastern investors owned more of Barclays after the majority of shareholders turned their backs on the bank’s £4.5bn fundraising plan.

Barclays said less than a fifth of existing shareholders opted to buy new shares as part of the scheme launched to help strengthen its balance sheet.

With that translating to an investment of around £750m, it leaves a series of Asian and Middle Eastern banks and sovereign wealth funds contributing the bulk of the funds and owning the new shares. The biggest new investor is now the cash-rich Qatari Investment Authority (QIA), which now owns around 6% of Barclays thanks to an estimated £1.4bn investment. Also new on board is Challenger, a wealthy vehicle led by the Qatari royal family, which is investing around £400m for a stake of around 2%.

Japanese group Sumitomo Mitsui Banking Corporation is paying £500m for a 2.1% holding, with Barclays’ existing shareholder China Development Bank maintaining a 3% stake thanks to a £156m injection. Singaporean sovereign wealth fund Temasek is contributing in the region of £160m, and more than a dozen other big institutional investors are also taking part.

Barclays chief executive John Varley said: “We look forward to building on our relationships with our new shareholders, Qatar Investment Authority and Sumitomo Mitsui Banking Corporation, and we appreciate the support of existing owners of our shares.”