Investors pump billions into Barclays

Banking giant Barclays today said Middle Eastern investors were pumping up to £7.3 billion into the business.

The cash injection from Qatari investors and the Abu Dhabi royal family comes as the bank looks to avoid calling on taxpayer funds to strengthen finances weakened by the credit crunch.

The funding move follows an earlier £4.5 billion cash call by the bank in June.

Qatar Holding and Challenger - a wealthy vehicle led by the Qatari royal family - are already investors in the group.

Barclays has also brought on board Sheikh Mansour Bin Zayed Al Nahyan - a member of the Abu Dhabi royal family - as a substantial new investor.

The Middle Eastern trio could end up owning almost a third of the bank when the warrants and notes issued by the bank are converted into ordinary shares.

Barclays said the funding move would allow it to meet the tougher requirements of the Financial Services Authority to help banks withstand financial turmoil.

The cash will boost its core tier one ratio - a key measure of capital strength - to 7.6 per cent, the bank said. It shares rose 8 per cent following the announcement.

Not using public funds to shore up the business also means that Barclays will be able to pay dividends to its shareholders - unlike Royal Bank of Scotland and Halifax Bank of Scotland.

Chief executive John Varley said: "Today's capital raising provides certainty and speed of execution."

In a trading update alongside the capital raising Barclays added that third quarter pre-tax profits were "slightly ahead" of the previous year.

The bank, which bought the US investment banking arm of collapsed Lehman Brothers last month, saw credit market writedowns of £1.2 billion but these were mostly offset by gains elsewhere.

"The financial market environment has continued to be as challenging as any that we have experienced.

"Against this backdrop, we have stayed close to our customers and clients, managed our risks carefully, and taken advantage of opportunities to progress our strategy," Mr Varley added.

The bank chief said the growing presence of Middle Eastern investors reflected the "significant shift" in the availability of capital and economic power over the past five years.

Mr Varley called the move - which has to be approved by shareholders - a "forward-looking and progressive approach to managing the share register".

He said it put Barclays among the strongest banks in the world in capital terms. "We have what we need," he added.

"We think the capital structure works well...we have chosen a route which means we don't have to take advantage of the offer of the Government," Mr Varley said.

voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
voicesSiobhan Norton on why she eventually changed her mind
ebookA unique anthology of reporting and analysis of a crucial period of history
Scottish singer Susan Boyle will perform at the Commonwealth Games opening ceremony in Glasgow
commonwealth games
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn