Proactive Investors - Run By Investors For Investors

Barclays confirms regulatory talks over fundraising

Barclays has confirmed speculation that it is looking to raise equity following reports the bank was eyeing a deal to plug its capital shortfall
Barclays confirms regulatory talks over fundraising

Barclays (LON:BARC) has confirmed speculation that it is looking to raise equity following reports the bank was eyeing a deal to plug its capital shortfall.

The Sunday Times claimed investors were approached last week about a potential rights issue to raise around £4bn.

Today, Barclays revealed it was in talks with the Prudential Regulation Authority (PRA) over its “financial and capital management plans” and said any information would accompany its interim results tomorrow (July 30).

It emerged last month that Britain’s lenders needed to raise around £27bn to fill a funding black hole. Barclays’ capital shortfall stood at £3bn at the end of 2012.

It comes alongside reports that the Treasury will hand the Serious Fraud Office (SFO) £2mln to fund its criminal probe into the deal that saw it avoid a government bailout at the height of the financial crisis.

Barclays is under investigation by the SFO and City watchdog the Financial Conduct Authority following allegations it lent Qatar money to help in the rescue of the British bank.

JP Morgan reckons that Barclays remains an attractive investment even after a £4bn capital raise.

“In our view, the ongoing litigation/redress costs are already included within the group's PRA capital adjustments (£8.6bn) and hence are unlikely to change the regulator's capital requirements,” said analyst Raul Sinha.

He incorporates a £1bn provision in his second quarter estimates and sees earnings per share (EPS) dilution of between 3% and 8.5% with an equity issue “at the top end”.

Barclays shares fell 3% to 310p each on Monday.

View full BARC profile View Profile

Barclays Timeline

Related Articles

April 24 2018
Redfund is positioning itself to become a top-tier cannabis incubator and accelerator

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use