Capital Markets

Barclays Raises $8.8 Billion

The British bank joins a pantheon of others that have gone to the capital markets to overcome write-downs related to the subprime mortgage crisis.
Stephen TaubJune 25, 2008

Barclays is the latest major global financial firm to tap the capital markets to shore up its balance sheet and boost liquidity.

The British banking giant said it raised about $8.8 billion (4.5 billion pounds) by selling shares to major investors that included Qatar Investment Authority, Sumitomo Mitsui Banking Corp., China Development Bank, and Temasek Holdings.

Barclays said the share issuance will produce capital ratios that are ahead of its long-standing targets of 7.25 percent tier one and 5.25 percent equity tier one. The new ratios are 8.8 percent and 6.3 percent, respectively.

“We strengthen our capital base and give ourselves additional resources to pursue our strategy of growth through earnings diversification,” said John Varley, group chief executive of Barclays. “We position ourselves to capture opportunities for new business at attractive margins in our retail and commercial banking businesses and in investment banking and investment management.”

A Bloomberg News report noted that banks and securities firms have raised more than $300 billion in the past year after racking up writeoffs and credit losses of nearly $400 billion from the collapse of the subprime mortgage market.