Barclays have announced it has struck a deal with the Qatar Investment Authority and the Abu Dhabi Investment Authority that will strengthen its capital position. The bank hopes to raise as much as £7.3 billion as it looks to avoid the government’s rescue programme. The proposal will see Barclays sell £5.8 billion to the Middle Eastern investors while other shareholders will purchase a total of £1.5 billion.
Several banks, including HBOS and the Royal Bank of Scotland, have already accessed the government’s bail-out plan, whilst Gordon Brown has called for banks to take advantage of the £40 billion available from the European Union to help small businesses through the economic crisis. £10 billion of that has already been consumed by high street banks .
Mr Brown said, ‘We must continue to encourage banks to lend . Having recapitalised the banks we must ensure that the money is used to sustain credit lines on normal terms to solvent businesses. I urge banks not to change the terms and charges for existing lending to small and medium sized enterprises’.
Barclays chairman Marcus Agius said, ‘Given the continuing uncertainties in the world capital markets, the Board of Barclays resolved to satisfy the capital raising requirements agreed with the UK authorities without delay. This we have done’.
Barclays Bank to Strengthen Capital Position
Barclays Bank to Strengthen Capital Position
Fri, 31 Oct 2008
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