By Mark Kleinman and Katherine Griffiths, The Telegraph Group Limited, London 2008. Published: June 08, 2008, 23:39
Executives at Barclays, Britain’s third-largest bank, are in advanced talks with overseas government-backed funds to secure a capital injection of more than £3 billion.
The lender has stepped up talks with investors from China, Abu Dhabi and elsewhere in the Middle East and Asia as it looks to follow its peers by recapitalising its balance sheet.
Advisers to Barclays said this weekend that it wants to tie up the new capital within the next few weeks. The bank’s strong preference is to raise capital from sovereign wealth funds rather than through a rights issue. China Development Bank, which already owns a small stake in Barclays, is among those with which the British lender is in talks as it comes under pressure from investors to boost its tier-one capital ratio.
Barclays wants to increase its core tier-one capital ratio to at least 5.25 per cent from its current level of 5.1 per cent. Analysts believe Barclays needs to raise £3 billion to £4 billion, and that it may want to up the ratio further to be in line with rivals.