Barclays said that it is to unveil plans to meet tougher UK capital adequacy rules, in response to reports that it plans a rights issue to raise funds of between £4bn and £5bn-plus.
The bank is seeking to strengthen its capital and balance sheet after UK financial regulator the Prudential Regulation Authority (PRA) reported last month that Barclays’ leverage ratio amounted to 2.5% after factoring in expected losses and other costs, against a required minimum of 3%. The cost of meeting the ratio is estimated at around £7bn.
Reports suggest that Barclays has lined up four book runners for its rights issue: Deutsche Bank, Credit Suisse, Citigroup and Bank of America Merrill Lynch (BofA Merrill).
Barclays shares fell after the bank responded to reports by confirming that it had been in discussions with the PRA “regarding its financial and capital management plans” and promised to update the market when it issues its first half interim results tomorrow.
According to a separate report in the Financial Times, the Serious Fraud Office (SFO) will receive a further £2m from the government to pursue its probe into Barclays’ emergency capital raising during the 2008 financial crisis.
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