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Barclays spurns government help to raise £6.5bn

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Date: Monday 13 Oct 2008

LONDON (ShareCast) - Barclays has unveiled plans to raise £6.5bn from shareholders and other investors without the need of government help, with a further £3.5bn to come from a dividend cut and other sources.

The bank intends to raise £3bn by end December 2008 through the issue of preference shares as part of the commitment made by UK banks to increase Tier 1 capital by £25 billion in aggregate by year-end.

A further £3bn will come form the issue of ordinary shares as soon as practicable after the announcement of our full year 2008 results and before 31 March 2009.

The total also includes £0.6bn already announced following the acquisition of Lehman Brothers North American investment banking and capital markets businesses.

Balance sheet management and operational efficiencies to release at least a further £1.5bn in equity resources, Barclays added, while the scrapping of the final dividend this year will raise £2bn. The dividend is expected to resume again in the second half of 2009.

Barclays added that the extra £6.5bn of equity raised would mean a pro forma Tier 1 Capital ratio as at 30 June 2008 of over 11%.

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