ID :
24324
Tue, 10/14/2008 - 14:46
Auther :
Shortlink :
http://m.oananews.org//node/24324
The shortlink copeid
Barclays to raise over 6.5 bn pounds from investors
London, Oct 13 (PTI) Banking giant Barclays Plc Monday said it will raise over 6.5 billion pound from investors to shore up its capital base and not call upon the government for emergency funding.
The bank's board has decided to raise in excess of 6.5 billion pound of Tier-I capital after taking into account the new higher capital targets set by regulator Financial Services Authority (F.S.A.) for all U.K. banks, Barclays Plc said in a filing to the London Stock Exchange.
"Given the strength of Barclay's well diversified business and the existing capital base, the Board expects that the additional capital will be raised from investors without calling on the government funding, which has been offered to U.K. banks," the filing stated.
This would result in a pro-forma Tier-1 capital ratio as
on June 30, 2008 of over 11 per cent, it added.
Tier-I capital refers to the core capital of a bank,
including equity capital and disclosed reserves, and shows its
capital adequacy.
In the view of the need to maximise capital resources in
the current economic climate, the Board of Barclays has
decided not to recommend a final dividend for 2008. This
dividend, amounting to 2 billion pound, would otherwise have
been payable in April, 2009.
"Our intention is to resume dividend payments in the second
half of 2009," Barclays said.
The effect of capital issuance would help in raising over
6.5 billion pound and at least a further 3.5 billion pound
through dividend and other actions, it added.
Barclays's fund raising plan, which was approved by the
F.S.A., includes issue of preference shares to raise 3 billion
pound by December 31, 2008. The amount would be Barclays's
contribution to the commitment made by U.K. banks to increase
Tier-1 capital by 25 billion pound in aggregate by year-end.
The plan includes issue of new ordinary shares to raise
0.6 billion pound (USD 1 billion), as part of Barclays's
announcement concerning the acquisition of Lehman Brothers
North American investment banking and capital markets
businesses, it said.
The issue of new ordinary shares to raise another 3
billion pound would be as soon as practicable after the
announcement of its full year 2008 result.
The offer of such shares would be structured so as to give
existing shareholders full rights of participation, the
statement added.
Besides, the balance sheet management and operational
efficiencies would release at least a further 1.5 billion
pound in equity resources.
As part of the above issuance of shares, Barclays has
in principle agreement with an existing shareholder to
contribute 1 billion pound in new capital.
However, in the event that any of the proposed capital
issuances do not proceed, Barclays, along with the other U.K.
banks, would be eligible to have access to the capital
facilities announced by the U.K. government.
The U.K. government has also confirmed that Barclays is
eligible to use the extended facilities with the Bank of
England and the government guarantee of term unsecured
issuance which have been made available to U.K. banks.
The bank's board has decided to raise in excess of 6.5 billion pound of Tier-I capital after taking into account the new higher capital targets set by regulator Financial Services Authority (F.S.A.) for all U.K. banks, Barclays Plc said in a filing to the London Stock Exchange.
"Given the strength of Barclay's well diversified business and the existing capital base, the Board expects that the additional capital will be raised from investors without calling on the government funding, which has been offered to U.K. banks," the filing stated.
This would result in a pro-forma Tier-1 capital ratio as
on June 30, 2008 of over 11 per cent, it added.
Tier-I capital refers to the core capital of a bank,
including equity capital and disclosed reserves, and shows its
capital adequacy.
In the view of the need to maximise capital resources in
the current economic climate, the Board of Barclays has
decided not to recommend a final dividend for 2008. This
dividend, amounting to 2 billion pound, would otherwise have
been payable in April, 2009.
"Our intention is to resume dividend payments in the second
half of 2009," Barclays said.
The effect of capital issuance would help in raising over
6.5 billion pound and at least a further 3.5 billion pound
through dividend and other actions, it added.
Barclays's fund raising plan, which was approved by the
F.S.A., includes issue of preference shares to raise 3 billion
pound by December 31, 2008. The amount would be Barclays's
contribution to the commitment made by U.K. banks to increase
Tier-1 capital by 25 billion pound in aggregate by year-end.
The plan includes issue of new ordinary shares to raise
0.6 billion pound (USD 1 billion), as part of Barclays's
announcement concerning the acquisition of Lehman Brothers
North American investment banking and capital markets
businesses, it said.
The issue of new ordinary shares to raise another 3
billion pound would be as soon as practicable after the
announcement of its full year 2008 result.
The offer of such shares would be structured so as to give
existing shareholders full rights of participation, the
statement added.
Besides, the balance sheet management and operational
efficiencies would release at least a further 1.5 billion
pound in equity resources.
As part of the above issuance of shares, Barclays has
in principle agreement with an existing shareholder to
contribute 1 billion pound in new capital.
However, in the event that any of the proposed capital
issuances do not proceed, Barclays, along with the other U.K.
banks, would be eligible to have access to the capital
facilities announced by the U.K. government.
The U.K. government has also confirmed that Barclays is
eligible to use the extended facilities with the Bank of
England and the government guarantee of term unsecured
issuance which have been made available to U.K. banks.
