labels: Stock markets - world
Barclays to raise $8.9 billion to boost capital and lend overseas news
25 June 2008

Mumbai: Barclays Plc, UK's fourth-biggest bank, has announced plans to raise 4.5 billion pounds ($8.9 billion) to boost capital expenditure and consumer lending in Asia and investment banking in the US.

Barclays will sell around 1.58 billion shares to Japan's Sumitomo Mitsui Financial Group Inc and sovereign wealth funds in Singapore, China and Qatar, the bank said in a statement.

Barclays will sell shares to Challenger, a company controlled by Qatar's royal family, the Qatar Investment Authority, Singapore's Temasek Holdings Pte and China Development Bank.

Tokyo-based Sumitomo will buy 500 million pounds of shares at 296 pence each.

Half of the funds so raised will be used to lift the bank Tier 1 capital ratio above its 5.25 per cent target while the remaining part will be used for ``business opportunities,'' including possible acquisitions, chief executive John Varley said.

Varley said Barclays will open 300 branches this year and expand trading in its emerging markets, commodities and foreign exchange units.

Barclays has written down 1.7 billion pounds on credit assets so far this year. That's less than RBS, the UK's second-biggest bank, which wrote down 5.9 billion pounds this year, and less than HBOS, the UK's biggest mortgage lender, which marked down 2.8 billion pounds.

Barclays rose as much as 25.25 pence  or 8.1 per cent, and was 7.6 per cent higher at 334.5 pence at noon, valuing the bank at 22 billion pounds.

Banks and securities firms have raised over $300 billion over the past one year after record writedowns and credit losses of almost $400 billion from the subprime mortgage meltdown.

Singapore's Temasek has also invested in New York-based Merrill Lynch and London-based Standard Chartered Plc.


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Barclays to raise $8.9 billion to boost capital and lend overseas