Barclays in £6.5bn boost

Barclays is close to announcing that it has raised the £6.5bn of new capital required of it by the Government. An announcement may come as soon as today.

Rather than accept government money to bolster its balance sheet, as Lloyds TSB, HBOS and Royal Bank of Scotland have, Barclays opted to raise the money from private investors. This it appears to have done from strategic investors including the Qataris and other Middle Eastern sources. At the time, the decision to go it alone by Barclays was regarded as "brave" by the City and rival bankers.

But Barclays' strong exposure to investment banking through Barclays Capital meant it did not want to accept government restrictions on bonuses and dividends. It was therefore reluctant to accept the government money that other UK banks have opted for. Barclays' executive were finalising the terms of the capital increase with investors last night.