Buy-back blow for Barclays investors
The repurchase reduces the number of shares in issue by just 1.5 per cent, at a cost to the bank of pounds 180m. If the buy-back had applied to all shareholders equally, it would have been worth about pounds 50 on a parcel of 500 shares, and would have involved a substantial amount of paperwork, cancelling shares for all shareholders. Barclays says it would also have charged normal broker's charges on the deal, which would have made it an unattractive proposition for many.
It also claims that the tax implications of a buy-back are not clear, and the institutions that did sell their shares back on Wednesday will have to negotiate their own tax position with the Inland Revenue.
If the cash had been paid out to shareholders as a special dividend, it would have been worth a little over 8p a share after tax, compared with the 50p a share some market analysts had been expecting. That is pretty small beer. But shareholders would at least have felt they were getting back some of the capital they have subscribed over the years to successive rights issues that the bank has made to boost its capital when business was expanding.
As it is, shareholders will have to hope that in spite of the pounds 180m reduction in the bank's capital resources and - therefore - in its earning power, future dividends will be marginally increased because there will be 1.5 per cent fewer shareholders. The shares fell 8p after the announcement, although that may have been the result of profit-taking after the results on Tuesday.
Gay couple beaten in park urge MPs to moderate language on gay marriage
Strewth mate. Aussies wave goodbye to Britain as it becomes too pricey to stay
World news in pictures
X marks the spot: The find that could rewrite Australian history
At least 91 feared dead including 20 children as massive tornado rips through Oklahoma
- 1 Tottenham to smash pay scale with £150,000-a-week contract in attempt to tie Gareth Bale to club
- 2 Austerity has hardened the nation's heart
- 3 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 4 Be more professional! GCHQ staff rapped as WikiLeaks founder Julian Assange reveals messages that he says point to 'fit up'
- 5 Top A&E doctors warn: 'We cannot guarantee safe care for patients anymore'
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£500 per day: Orgtel: A top tier banking client urgently requires Finance Busi...
£425 - £550 per day: Orgtel: Senior Finance Project Manager - £550 - Bristol -...
£150 - £250 per day: Orgtel: KYC Analyst - London - Banking - £150-250/day C...
£500 per day: Orgtel: A top tier banking client urgently requires Finance Gove...