Barclays Sub-Prime Rumours ‘Unsubstantiated’
by Stewart Douglas
Story link: Barclays Sub-Prime Rumours ‘Unsubstantiated’
Barclays bank has today again been involved in speculation as to its performance, dismissing claims that it was preparing to uncover significant losses in exposure to US sub-prime linked securities.
The news today that the bank may be preparing to unveil its true exposure to the sub-prime collapse sees yet another dark day for the British bank, which has seen the value of its shares plummet and its future financial health publicly questioned.
Whilst Barclays today announced that the rumours were not of substance, markets nevertheless were cautious in dealings with the bank’s securities for fear that the bank may indeed at present be disclosing significant bad debt exposure.
The rumours were given further weight in light of losses at major US-based investment banks such as Merrill Lynch and Citigroup, both of which lost on a substantial exposure to the sub-prime and sub-prime linked investments.
Barclays has been widely considered to be having problems since its failed bid to takeover Dutch bank ABN Amro in which it lost out to a rival consortium led by the Royal Bank of Scotland.
Trading today in Barclays shares on the London Stock Exchange was dismal, losing 9% in value before being suspended for a period of time. Despite the overall negative trade today, shares did manage to bounce slightly following the announcement from the bank dismissing the rumours.
Meanwhile shares in a number of other banks were today down following the news, which was seen to be detrimental to the overall health of the UK finance market in the wake of the extent of problems suffered in the US economy several months ago.
Chief executive of Barclays John Varley has again today denied rumours that his job was under threat, suggesting that the company was performing well and would continue to do so under his leadership.
