Barclays completes STG5.8b cash call to bolster capital
LONDON: Barclays completed its STG5.8 billion (RM29.6 billion) fundraising yesterday to meet a capital shortfall identified by its regulator, after almost 95 per cent of the British bank's investors stumped up more cash.
Barclays launched its rights issue three weeks ago, prompted by the British regulator's demand that it improve its leverage ratio - a measure of its capital to assets - to three per cent by mid-2014.
Barclays said bookrunners for the offer sold the shares that were not taken up by investors - worth STG463 million - at 268 pence apiece, or a 1.8 per cent discount to Thursday's close.
Barclays shares were down 0.1 per cent at 272.8p by 1110GMT, which dealers said was a resilient performance and reflected the modest size of the leftover shares.
The bank also plans to sell STG2 billion of bonds that convert into equity if the bank hits trouble and to shrink the balance sheet of its investment bank to help it meet its leverage ratio target.
"Post the rights issue the regulatory risks have been reduced but not eliminated," said Mike Trippitt, analyst at Numis Securities, saying there could be "pressure to deleverage the business further".
The rights issue was the biggest by a British bank since 2009 and raised the equivalent of 15 per cent of Barclays' market value.
Antony Jenkins, who took over as chief executive a year ago, is trying to rebuild Barclays' reputation after a string of scandals. He said the rights issue would deal "quickly and decisively" with the regulator's demands.
The rights issue forced him to push back his target to deliver a return on equity above about 11.5 per cent by a year to 2016.
Barclays' rights issue prospectus also said it faced a STG50 million fine from Britain's Financial Conduct Authority for its failure to adequately disclose fees it had paid Qatari investors over the last five years.
Those fees, linked to fundraising in 2008, continue to be investigated by other authorities in Britain and the United States. Reuters