Barclays refuses to rule out capital raising

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Barclays refused to rule out raising capital yesterday ahead of the bank’s trading statement on Thursday. John Varley, Barclays’ chief executive, said: “You would never take that choice off the table, because you want to have all the tools available to pursue your strategy.”

Barclays surprised some investors last month when it said it did not need to follow HBOS and Royal Bank of Scotland in raising fresh capital. Both of Barclays’ rivals said they were aiming for equity tier one capital ratios of at least 6 per cent whereas Barclays is targeting 5.25 per cent.

Citigroup analysts said yesterday that if Barclays took £2.3bn of write-downs in the first quarter it would need to raise £6bn to bring its equity tier one ratio to 6.5 per cent. Mr Varley said it was “by no means obvious” that a ratio of 6 per cent or more was needed.

Barclays has indicated that it favours raising funds from a sovereign wealth fund over a rights issue if a capital injection is needed. The bank’s shares closed down 1.5 per cent at 444.75p.