Barclays’ shareholders baulk at foreign fundraising

by Gill Montia

Story link: Barclays’ shareholders baulk at foreign fundraising

Barclays’ shareholders have been voicing their disappointment at the bank’s decision to raise funds from overseas investors, rather than make use of the Government’s rescue package.

At the end of last week, Barclays announced that it is raising £5.8 billion from investors in Qatar and Abu Dhabi, who will then hold a combined stake in the company of over 30%.

Existing shareholder, Qatar Investment Authority, will provide up to £2 billion, with further cash coming from members of the royal families of Qatar and Abu Dhabi.

The bank will raise an additional £1.5 billion from existing and new investors, to boost its capital position.

When the Government announced its £500 billion rescue package for the UK’s High Street banks in early October, Barclays immediately made it clear that it would attempt to raise capital from the markets, preferring to pursue a course of self-determination rather than risk the strings attached to the Government bail out.

However, Barclays’ board and has now been accused of protecting executive bonuses at the expense of shareholders and has been criticised for the terms it has offered its foreign investors.

In addition, analysts estimate that the £5.8 billion raised will cost more than if the bank had turned to the Government scheme.